s

1

CORPORATE SOCIAL RESPONSIBILITY

"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

Phillipines.

Business and society have been coeval since time immemorial and also have been inter-

dependant. This relationship between business and society is appreciated in Rigveda also :

“Corporates should work like a honeybee, which takes the nectar of a flower without the flower

being losing its shape and fragrance and provides honey for the wellbeing of the society.” It

means that both have to work on a symbiosis manner for each one’s survival and success. The

business history is replete with evidences to believe that business flourishes only where society

thrives. On the contrary, business dies when society condemns and rejects it. No business can

survive without societal approval and sanction. The inter-dependant nature of relationship

between the business and the society is best illustrated by the management guru Peter Drucker

(1954) by the example of a ship and sea. He states that the relationship between business and

society is “like the relationship between a ship and the sea which engirds it and carries it,

which threatens it with storm and shipwreck, which has to be crossed but which is yet alien

and distant.” No doubt, business has been conducted primarily to earn profit and / or create

wealth. However, there are reasons and evidences to believe that the mindless obsession with

profit maximization at any cost carried to any extreme has led to spurt in sordid activities in

business causing harm to both the business and society and ultimately leading business to

flounder and fizzle out. Enrons Parmalats, Union Carbide, and World.com are to name a few

representing examples of such business collapses. Business history is also replete with

examples that only the businesses that are conducted through good or right practices enjoy

2

societal sanction and survive and last for long. Johnson & Johnson, Maruti Limited, Reliance

Industries Limited, and Tata Iron and Steel Company are such examples that indicate that being

good in conducting business activities proves good for businesses also. Hence, there has been

increasing concern for conducting business in a good or ethical manner. Though there has been

a spurt in research activities on business ethics or ethics in business, not much research has so

far been conducted on what actually makes business ethics and how being ethical or good is

good for business also.

3

INTRODUCTION DR’REDDY LABORATORIES

Dr. Reddy’s Laboratories was founded by Dr Anji Reddy, an entrepreneur-scientist, in 1984.

The DNA of the company is drawn from its founder and his vision to establish India’s first

discovery led global pharmaceutical company. In fact, it is this spirit of entrepreneurship that

has shaped the company to become what it is today.

Dr Anji Reddy, having moved out of Standard Organics Limited, a company he had

successfully co-founded, started Dr. Reddy’s Laboratories with $ 40,000 in cash and $120,000

in bank loan! Today, the company with revenues of Rs.2, 427 crore (US $546 million), as of

fiscal year 2006, is India’s second largest pharmaceutical company and the youngest among its

peer group.

The company has several distinctions to its credit. Being the first pharmaceutical company

from Asia Pacific (outside Japan) to be listed on the New York Stock Exchange (on April 11,

2001) is only one among them. And as always, Dr. Reddy’s chose to do it in the most difficult

of circumstances against widespread skepticism. Dr. Reddy’s came up trumps not only having

its stock oversubscribed but also becoming the best performing IPO that year.

Dr. Anji Reddy is well known for his passion for research and drug discovery. Dr. Reddy’s

started its drug discovery programme in 1993 and within three years it achieved its first

breakthrough by out licensing an

anti-diabetes molecule to Novo Nordisk in March 1997. With this very small but significant

step, the Indian industry went through a paradigm shift in its image from being known as just

‘copycats’ to ‘innovators’! Through its success, Dr. Reddy’s pioneered drug discovery in India.

There are several

such inflection points in the company’s evolution from a bulk drug (API) manufacturer into a

vertically integrated global pharmaceutical company today.

Today, the company manufactures and markets API (Bulk Actives), Finished Dosages and

Biologics in over 100 countries worldwide, in addition to having a very promising Drug

Discovery Pipeline. When Dr. Reddy’s started its first big move in 1986 from manufacturing

and marketing bulk actives to the domestic (Indian) market to manufacturing and exporting

4

difficult-to-manufacture bulk actives such as Methyldopa to highly regulated overseas markets,

it had to not only overcome regulatory and legal hurdles but also battle deeply entrenched

mind-set issues of Indian Pharma being seen as producers of 'cheap' and therefore ‘low quality’

pharmaceuticals. Today, the Indian pharma industry, in stark contrast, is known globally for its

proven high quality-low cost advantage in delivering safe and effective pharmaceuticals. This

transition, a tough and often-perilous one, was made possible thanks to the pioneering efforts of

companies such as Dr. Reddy’s.

Today, Dr. Reddy’s continues its journey. Leveraging on its ‘Low Cost, High Intellect’

advantage. Foraying into new markets and new businesses. Taking on new challenges and

growing stronger and more capable. Each failure and each success renewing the sense of

purpose and helping the company evolve.

With over 950 scientists working across the globe, around the clock, the company continues its

relentless march forward to discover and deliver a breakthrough medicine to address an unmet

medical need and make a difference to people’s lives worldwide. And when it does that, it

would only be the beginning and yet it would be the most important step. As Lao Tzu wrote a

long time ago, ‘Even a 1000 mile journey starts with a single step.’

OUR CORE PURPOSE

“ To help people lead healthier lives”

OUR VISION

“To become a discovery led global pharmaceutical company”

OUR VALUES

We strive for excellence in everything we think, say and do.

5

Quality: We are dedicated to achieving the highest levels of quality in everything we do to

delight customers, internal & external, every time

Respect for the Individual: We uphold the self esteem and dignity of each other by creating

an open culture conducive for expression of views and ideas irrespective of hierarchy

Innovation & Continuous Learning: We create an environment of innovation and learning

that fosters, in each one of us, a desire to excel and willingness to experiment

Collaboration & Teamwork: We seek opportunities to build relationships and leverage

knowledge, expertise and resources to create greater value across functions, businesses and

locations

Harmony & Social Responsibility: We take utmost care to protect our natural environment

and serve the communities in which we live and work

Our business practices are guided by the highest ethical standards of truth, integrity and transparency.

Corporate social responsibility

While 'Sustainability: The Triple Bottom Line' as a term may have a contemporary ring to it,

the spirit underlying it has been relevant through the ages.

In 1987, the World Commission on Environment and Development (established by a resolution

of UN General Assembly) defined sustainability as "Development which meets the needs of the

present without compromising the ability of future generations to meet their own needs". It also

popularized the use of this term for resources renew ability, desired business plan and a

progressive way of doing things.

At Dr. Reddy's, we believe that any high performance sustainable organization rests on the

three pillars of economic, social and environmental performance. To be a truly sustainable

6

organization, in the broadest definition of its terms, an organization must perform well across

all three dimensions.

As a company, we are fully committed to the principles of sustainability. We see our

stakeholders as shareholders, to whom we promise sustained economic performance, the

society - to whom we promise to create positive impact through our activities both business as

well as voluntary - and finally the environment, which we promise will be well protected and

enriched from our various activities.

In recognition of the conviction that the prosperity of communities is integral to the success of

companies, Social Initiatives is higher on the agenda of more companies now than ever before.

At Dr Reddy’s, we take pride in the fact that our products and what they are intended to

achieve represent the core of Social Initiatives – to help people lead healthier lives. The

company achieves this objective through increased access and affordability of its generics, API

and branded generics products and addressing unmet and undeserved medical needs by

innovation through its Specialty and NCE businesses.

At Dr Reddy’s, Social Initiatives represents an integral component of Corporate Social      Responsibility. Our

investments in the communities have extended beyond the adhoc disbursement of charity to a planned program in

capability building, helping extend the sporadic to the sustainable. The various organizations that we support are:

Dr. Reddy’s Foundation

NAANDI Foundation

Centre for Social Initiative & Management (CSIM)

At the company, Social Initiatives does not just cover the community, but also

employees. This re-interpretation has happened for an important reason: society

represents a mix of employees and non-employees. By including employees in our

definition of Social Initiatives, the company has demonstrated that no initiative can

succeed unless if the initiators of the improvement do not figure among the beneficiaries

themselves. It is this comprehensive address – employees to communities – that enhances

7

the impact of the company’s social initiatives, strengthening its case for true

sustainability.

Dr. Reddy foundation

At Dr. Reddy’s we believe that for any development to be sustainable, people need to be

empowered to support themselves in the first place. The company also believes that in

every human being and organization there is a latent need to ‘give back to society’.

It is with this perspective that Dr. Reddy's Foundation was incepted by Dr K Anji Reddy,

Chairman of Dr. Reddy’s Laboratories, in 1996.

In Dr. K. Anji Reddy’s own words,

The Foundation acts as a social change catalyst that fosters, develops and promotes

initiatives at individual / group / organization levels to promote sustainable human and

social development. Believing in the inherent motivation and capacity of the human

being for progress – given the appropriate and adequate environment - the Foundation

innovates and tries out novel concepts in pilot models that are continuously refined and

scaled up to cover larger groups of deprived populations.

Life . Research . Hope - Driven by this spirit, the company, led by the Chairman, Dr K

Anji Reddy, called upon similar-minded corporates and created a new social platform, a

8

not-for-profit development organization that could showcase not only to India but the

international community as well, the depth of corporate will in shouldering the

responsibility of finding solutions to long-pending social development problems of the

country.

NaandiFoundation

Naandi Foundation was created through this effort. It is an autonomous, public trust that

works together with governments, corporates and civil society to improve the lives of the

underprivileged.

To underline the company's commitment in supporting Naandi's objectives, Dr K Anji

Reddy became one of its principal founders, and took on the responsibility of its

Chairmanship as well.

The employees of Dr Reddy's too have been staunch supporters of Naandi's vision of

improving lives. The company has defined 'corporate giving' by coming forward to

donate unconditionally to Naandi's social initiative programs through the Power of 10™.

The Power of 10™

9

The Power of 10™ is a mechanism created by Naandi that allows everyone to do their bit

for the society, even if it is donating Rs 10 every month towards a cause. And leading the

way, we are proud to say, have been the company's factory workers. They give

generously to the Power of 10™ , which is channelised by Naandi into its education

project, popularly known as the 'Support Our Schools' program, aimed at improving the

quality of education in over 2000 government schools.

To encourage this culture of giving showcased by its employees, Dr. Reddy's too makes a

contribution to the Power of 10™ that matches the contributions made by the employees.

Dr. Reddy's has become a model that is being emulated by more and more corporates,

institutions, and individuals thereby enabling Naandi to become the platform that allows

for an interface between civil society and the underprivileged.

For employees who want to do more, Naandi offers several windows of opportunities to

give back to the society. These range from adopting government schools, and

volunteering in them to improve quality education, to participating in tribal development

projects. Dr. Reddy's new recruits inevitably get their first taste of rural India, every year,

through an Outbound Rural Sensitivity Training, that is organised by Naandi.

Ability to garner civil society support has propelled Naandi's growth and reach. It is the

only NGO in the country to run automated central Midday meal kitchens in urban

centres - the ones at Hyderabad and Visakhapatnam presently cater to around 1200

government schools. So far the kitchens have supplied 45 million meals, without any

complaints, to the underprivileged that come to these schools. This task gets bigger as

Naandi targets to implement this model for the children of 5 other cities in the country by

2005.

Among its other innovations, Naandi has enabled the revival of dead irrigation assets by

converting the small farmer into a micro-entrepreneur and bringing water back to more

than 40,000 drought -hit families. By creating sustainable and cost-effective social

entrepreneurship models Naandi is enabling technology transfers from The Lawrence

10

Berkeley National Laboratory, California , to bring safe drinking water to Indian villages.

And in keeping with its vision, Naandi continues to create new development

breakthroughs in the areas of health, education and livelihood that are being replicated by

governments across the country to impact millions of men, women and children in the

country.

Centre for Social Initiative and Management (CSIM)

Centre for Social Initiative and

Management (CSIM), an

Initiative under the aegis of

Manava Seva Dharma

Samvardhani (MSDS), is a

registered Public Charitable

Trust  with Mr. P.N.Devarajan as

its founder and Managing

Trustee. The Hyderabad Chapter

of CSIM, started in 2002, is

supported by Dr.Reddy's as

CSIM fits Dr.Reddy's concept of

social sustainability through

enhancing community value

through their programmes.

Several social divides confront the Indian society

today: their growing intensity and emerging

newer ones make the situation increasingly

difficult.

Social Work education in the country does not

prepare students for such a

challenge - therefore, the need for professional

and entrepreneurial talent. Compassionate

individuals, who pitch in with noble intentions,

have limitations in finding breakthrough

solutions and thus add to the list of non-

performing and under-performing NGOs.

The environment thus presents an opportunity for individuals with initiative and who can

think of bold and creative solutions to make a significant difference through concrete

actions. The challenge is to discover and mould Social Entrepreneurs, who can generate

radical, path-breaking solutions to social divides, who can take reasonable risks and

persistently work towards creating a lasting social impact. Similarly, small and medium

tier non-governmental organizations (NGOs), with compassionate individuals as leaders,

also need organizational skills to recharge themselves, refocus priorities and become

11

impact-driven. They need a long-term approach to sustenance, creatively plan a revenue

model and leverage hidden resources including volunteer talent.

Centre for Social Initiative and Management (CSIM) is a learning center that

Enrolls, discovers and shapes Social Entrepreneurs

Supports the process of social entrepreneurship in small and medium NGOs

Provides a volunteer constituency to Social Entrepreneurs and NGOs

At CSIM, you will have access to:

Social Entrepreneurship Initiative that is knowledge and involvement based and offers

learning in Social Entrepreneurship. The programs are:

One year PG diploma in Social Initiative and Management,

Four month part-time program in Social Entrepreneurship Outlook,

Training for volunteers who wish to partner with Social Entrepreneurs,

Entrepreneurship Learning club as an interactive networking platform,

Incubation service to design and deploy impact based social change initiatives

Internship program for the socially conscious

Customized management skill development programs for NGOs

Volunteering Initiative, which offers short term and action oriented programs for

socially conscious individuals, youth and working professionals. Several platforms such

as the Social Action Group, Student Volunteer Consulting program and Student-Non

Profit Exchange programs are operational with individual volunteers and also in

partnership with colleges, schools and corporates.

Education - Program Overview

12

A conviction that poor are not poor but rich by a state and conscientious civil society

and it is by accessing those who had failed in getting democratic institutions work for

them, with the institutions and standing by them in realizing their constitutional rights

has been the motive force behind all what DRF has been doing since 1997.

Education is more than attending schools, it decides how life would be and it relieves

one from the circularity in life and it is the deciding line that separates participants in

the development from those who are left behind. The very essentiality of education

makes it a fundamental right. DRF choose to stand by the children, who are denied of

that right and make every effort possible to support them realize their rights.

Besides undertaking the programme of

mobilising children to school we thought it

would be half hearted effort unless we

address the issue of quality education which

is no less a right than accessing school, which

led us to take up a programme of partnering

with schools in Secunderabad and Hyderabad

districts in improving school processes,

curriculum delivery mechanisms to ensure

every pupil get trained in curricular

objectives proclaimed by the government.

Organization had taken up several programs to support young persons reclaim their

education, ABC centers mobilize adolescent boys and girls who are past their school

age Give them education, prepare them to complete 7th and 10th exams and let them

acquire relevant Certification to pursue their careers .DRF also facilitates youngsters to

get trained in the modern skills like communication and computers and expose them to

various opportunities.

As we are not duplicating the functions of the government, we are not playing the role

13

of the state by presenting alternative institutions; conversely we are not working on

behalf of the communities who are deprived of life's opportunities to secure them

services, what we are consciously attempting is to prepare communities realize and

articulate their rights And invest in the processes that facilitate them access institutions.

Since education is the field of activity we chose and mobilizing communities through

awareness campaigns, facilitating youth, parents and leaders of the community to form

Comities that look after children's schooling particularly engaged in campaigns against

the system of child labour that deprives children of their right to education.

We have been working in close collaboration with the government so as to sensitize

them of the needs and attending difficulties of the communities in schooling their

children and Preparing government schools to grow into quality oriented institutions

that deliver their mandate effectively.

S. no Programme No of Schools/

Centers

Places Number of

Children

1

Interventions in

Government

Schools

57 Schools

15 Schools

Balanagar mandal,

Rangareddy dt

Hyderabad &

Secunderabad

32,792

2Intervention in

Tribal Schools32 schools

V.R.Puram mandal,

Khammam3,633

3Kallam Anji

Reddy Vidyalaya1 School Madinaguda, Hyderabad 1,400

4 Vocational 1 School Madinaguda, Hyderabad  

14

College

5Adolescent Bridge

Course7 Centers Hyderabad 851

6Short term

Vocational Course1 Center Kawadiguda, Hyderabad 350

7Residential Bridge

Course Center2 Centers

Sevalalnagar Tanda,

Moosapet, Balanagar

mandal

75

8Early Childhood

Centers19 Centers

Balanagar mandal,

Rangareddy Dt Andhra

Pradesh

1463

Livelihoods - LABS

Dr. Reddy’s Foundation has been engaged in promoting pioneering public-private

partnership models linking life, learning and livelihoods. The foundation addresses the

cause of poverty alleviation, with specific emphasis on livelihoods for marginalized youth.

Livelihood Advancement Business School (LABS)

15

The Livelihood Advancement Business School

(LABS), a flagship program of Dr. Reddy's

Foundation (DRF), since its inception in 1999,

promotes tailor made programs targeted at youth

in the age group of 18 -35 years from

economically weakest sections and enables them

to gain access to opportunities for sustainable

livelihoods and growth in the New Economy.

LABS had so far created over 70,000 new

economy livelihoods in

LABS assumes the role of a catalyst, facilitating ongoing, concurrent participation of

citizens, corporate and government in finding lasting solutions for sustainable livelihoods.

LABS is now operational in 86 centers across India. 11 states of the country have been

already covered by the program including all the major metropolitan towns, cities as well

as small and medium towns. There are 26 new sector curriculums within the LABS

framework, for e.g., BPO, retail academy, Customer Relations and Sales, Micro Irrigation,

Automobile, Hospitality, Bed side Patient Assistants, etc. Each curriculum is incorporated

into the LABS framework after a thorough market survey is undertaken in the sector. The

survey analyses the possible livelihoods in the respective sector and the potential for

upward mobility for the LABS aspirant. The training is imparted for duration of 90 days,

which in itself is unique. The classroom modules are unique with lot of emphasis on life

skills, soft skills such as communication, emphasis on team work and technical skills. The

industry also participates in the classroom activity by taking special guest sessions for the

aspirants at regular intervals. The whole program is a complete package of skill based

training which is kept abreast with the market demands and technology.

Our economy is growing but still there is a mismatch between employment opportunities

and skill sets of the unemployed, which is deepening poverty in India. The numbers of

16

those seeking active employment is likely to reach 692 million by 2007. The jobless after

trying migration, alternative sources, crime or insurgency opts for the final desperate act:

Suicide. The numbers of suicides are shocking among those who declare themselves

totally unemployed. As the duration of unemployment increases, suicide rates go up. With

time the percentage of unemployment has risen from 5.99% (1993-94) to 7.3 % (2000-

2004). While 96% of India's children enroll in primary school, by the age of 10 about 40%

have dropped out and just over a third of high school students graduate creating a huge

pool of dropouts who are unsuitable for mainstream employment. Static education system,

obsolete curriculum asymmetric to the new economy and diverse socio-economic reasons

contribute to unemployment despite a dynamic labor market. LABS tackles this systemic

problem with a market based approach that is sensitive to socio-economic needs of

marginalized youth. Aimed at mainstreaming and ensuring economic security of youth

who could be “victimized” by poverty, LABS is an example of synchronous social action

of different players. Initially, LABS faced difficulties like industry reluctance to recruit

non-graduates, government cynicism about effectiveness of the program, community

distrust of run-of-the-mill vocational training and difficulty in mobilizing youth. The

concept of LABS being highly appreciated, various organizations worldwide are looking

at replicating LABS, so that youth can take advantage of this program. Government &

Non- Government organizations, Corporate and many International organizations are

collaborating with DRF to implement the LABS program across the country. DRF has

ventured into many public private partnerships for the successful implementation of the

LABS program.

17