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Mainstream Corporate Social

Responsibility: Developing Markets

for Virtue

By

Darshan Mehta 10P211

Mohit Bajaj 10P212Ashwin Nair 10P213

Nidhi Bhartia 10P214

Nikhil Gupta 10P215

Nisheet Pandey 10P216

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Defining CSR and Mainstream

Corporate Social Responsibility Internal initiatives and policies and

processes that ensures company is

responsible and ethical

External initative to contribute to andimprove the community in which the

organization operates

Impact of both internal and external

initiative on the society

Corporate Social

Responsibility

Law

Commitments

CSR is understood to be the way firms integrate their social, environmental, and

economic concerns into their values, culture, decision making, strategy and

operations in a transparent and accountable manner and thereby establish better

practices within the firms, create wealth and improve society

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Mainstream Seen to be on companys agenda in a legitimate, credible and ongoing

manner

Incorporated in companys day to day activity

Coupled in a way that affects day to day activity of the company

Defining CSR and Mainstream

Coupled(Well funded, Highly

visible, firms identity)

Decoupled

(Short term, easilyterminated, not diffused

in other aspects)

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CSR Literature

Management of CSR initiatives from 2 perspectives

Different views on CSR Milton Friedmanserved - Maximize wealth

Enterprise dependent and accountable to stakeholders

Firms go through different stages of CSR: Elementary, transformational, value-led programs

Focused on how customers respond to CSR at individual level

CSR have positive effect on consumer's attitude

Research emanating fromMarketing

Whether the firm should engage in CSR and its effect on financialbottom line

Positive relationship between CSR and profitability

Jantzi Social Index

Research emanating fromManagement Literature

Underlying assumption: There exists single, preferred way of developing and managing CSR

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Vogels Conceptualization CSR activity as a function of an externalmarket for virtue

Markets vary in their demand for CSR: Socially

conscious market& Social Economic Market

Firms may vary in their inclination towards

CSR performance: CSR sensitive suppliers &

Business as Usual Suppliers

Existence of Heterogeneity in market demand

and supply

Society has created varying demand for

business virtue & firms have responded,

rewarded accordingly

CSR Literature

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Methods Try to understand internal dynamics of org. through

managers (key informants) perceptions

97 elite interviews in two stages

Objectiveto understand interactions, processes, perceptions,beliefs and values that may be tacit

Try to evaluate decision makers understanding of the

phenomenon Semi structured, using broad questions as prompts

Stage 1

69 interviews with managers participating in a social alliance

11 alliances; 26 organizations (companies, non-profits,consultants) from North America

Questions about how partnership started, evolved, selection ofpartners, goals, challenges, and day-day workings, benefits, and

learning

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Methods (contd.) Stage 2

29 interviews to assess if conclusions from initial study

were supported and could be extended to a broad conceptualization of

CSR

Applicable outside North America

Questions about mainstreaming of CSR, reasons for starting,

evolution of CSR, challenges, factors for success, future of CSR

Also culture, process, and ways of thinking about CSR

3 authors analyze3d data using standard qualitative methods

Limitations

Qualitative research; subjectivity may be a matter of concern

Used an iterative process to agree upon commonality of themes

and perspectives

Use of multiple viewpoints within the same organization

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Findings Companies use 3 different frames/orientations towards CSR

BusinessCase Model

Social ValuesLed Model

Syncretic Stewardship model

Social Responsibility broadly framed to simultaneously serve multiple

stakeholders

Different orientations represent different perceptions of

External Market for Virtue

Internal Market for Virtue

Extent and manner in which CSR actions are encouraged and rewarded

within organization

Propensity of employees to deliver on CSR initiatives

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The Business Case Model

s

Lack of corporate social policy entrepreneurs

CSR Investment has to drive business results

Mainstreaming CSR means pursuing viable business opportunities with a CSRangle

Clear cut CSR standards so that socially conscious customer has unambiguousdecision criteria

CSR does not raise the consumers price dramatically

Companys core competency gets leveraged

Three characteristics of the business case

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Social Values Led Model

CSR is defined around a particular social issue

Non economic criteria and stakeholders associated

with them are considered important

Corporate social policy entrepreneurs placeemphasis on social and environmental bottom-lines

The primary challenge is to establish theauthenticity of its business purpose and goals

Evangelical zeal and a propensity for action characterize this moel

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Syncretic Stewardship

For business case and social values-led firms, incentivescan be developed that

encourage them to gravitate toward the Syncretic Stewardship orientation,

which may well represent the most sustainable dimension of CSR.

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SPICE (Society, Partner, Investor, Customer, Employee)

S

I,E

C,P

S PICE PICE S

Social Model Syncretic Model Business Case Model

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Internal Market for Virtue

Id never work for a company with CSR before.Now I wouldnt work for

a Company without CSR.

Bake in CSR

Demand and Supply of CSR Behavior

(from Case)

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Billionaire Shiv Nadar takes the brightest children from the poorest villages

of rural India and sends them to boarding school.

VidyaGyan - Nadar's philanthropic vision.

Investment- $400 million -Using his HCLdividends, proceeds from stock sales andinvestment gains.

another $600 million in next 5-7 Years

Nadar will join an elite group of tycoonsworldwide who have donated at least $1billion over their lifetimes

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CSR: From philanthropy to commercial interest ?

CSR today is basically linked to the broader issue of Corporate Governance and Strategy

A company entering a new market, for instance, will regard CSR as an image-building strategyin its bid to minimize the risk associated with investing in a geography or product line

Companies that are fairly well established, but for whom long-term sustainability of business is

the prime objective - ITC e-Choupal

Another school of corporate thought dwells on all stakeholders of the company shareholders,employees, customers, vendors, social organizations, regulators and the communities in whichit operates- TATA

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Degree to which organizational members use norms, rules or procedures to alleviate unpredictability

Business Case firms

Highest on uncertaintyavoidance

Planned extensively, hadto produce quarterlyresults

Followed well established

routines

Social Values led firms

The lowest on uncertaintyavoidance

Founders of the firmsmoved forward with astrong sense of missionnot understanding how toaccomplish it

Syncretic stewards

low on uncertaintyavoidance

Understood the possibilityof conflicting duties andproblems

Relied on negotiations

and creative approachesto problem solving

Business Case firms

These firms put profitsand timelines beforepeople


High on humanorientation

Focus on people and theirquality of life high

Syncretic stewards

High on humanorientation

Focus on people and theirquality of life high

Uncertainty avoidance

Humane orientation

Degree to which organization rewards individuals for being fair, altruistic and caring. It can be

judged by how the firm treats its employees, external stakeholders

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Degree to which individuals are confrontational or aggressive in their relationships

Business Case firms

High on assertiveness Highly confrontational

and competitiveinternally, pitting onegroup against the other


Highly assertive when itcame to making decisionsabout their focal issue,but were less aggressivein their approach

Syncretic stewards

Mixed and nuanced onassertiveness

Were less assertive whiledealing with stakeholdersbut more assertive withthe press or industrytrade groups

Business Case firms

low on future orientationand more short term intheir CSR planning

They need to be flexibleand adapt to changingmarket conditions quickly


Mid-range in futureorientation

Clearly understood theirlong term challenge ofdealing with a majorsocial issue

But often focused on

what could be done today

Syncretic stewards

highest in futureorientation

Saw the importance ofstakeholder engagementas a route to long-termlegitimacy and viability

Assertiveness

Future orientation

Degree to which organization encourages its members to plan for the future versus the present

csr final (2)

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