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Social Responsibility of business refers to what

business does over & above the statutory

requirement for the benefit of the society.

CSR is also known as Sustainable Responsible
Business (SRB), or Corporate Social
Performance is a form of Corporate self
regulation integrated into a business model

CSR is manner of operating a business that
meets or exceeds the ethical, legal, commercial,
and public expectations of customers,
shareholders, employees, and communities

CSR includes:
Take corrective action before it is required
Work with affected constituents to Resolve Mutual
Publicly admit their Mistakes
Get involved in Appropriate Social Programmes
Help to correct Environment Problem
Take needed public stands on Social issues
A strong CSR can:
Help recruit and retain good employees
Help differentiate the firm and enhance its brands
Help cut costs, such as minimizing packaging,
recycling, economizing on energy usage, and
reducing waste in operations
Help the firm avoid increased taxation,
regulation, or other legal actions by local
government authorities
Following charges that its foreign contract
factories were run like sweatshops
Nike took steps to improve working
Now, Nike is the largest private employer in

Ethics are moral principles and values that govern
the behavior of people, firms, and governments.

Corruption is the abuse of power to achieve
illegitimate personal gain.

More than 30 percent of MNCs believe corruption is
a major or severe concern in their global activities.

Bribery is common and can take the form of grease
payments, small inducements intended to expedite
decisions and transactions or gain favour.

Examples: Firms may-

Falsify or misrepresent contracts or official documents

Offer or accept bribes or inappropriate gifts

Tolerate sweatshop conditions or abuse employees

Use false advertising or other deceptive marketing

Engage in deceptive or discriminatory pricing

Deceive or abuse intermediaries in the channel

Undertake activities that harm the natural environment

Growing sense that responsibility for righting
social wrongs belongs to all organizations
Growing business need for integrative
mechanisms such as ethics
ethics reduce operating uncertainties
Voluntary guidelines avoid government impositions

Ethical conduct is needed in an increasingly
interdependent world
Companies wish to avoid problems and/or be
good public citizens
(Be Profitable)
(Do what is right)

(Contribute to the

(Obey the law)
Corporations are Primarily Economic Institutions.
Must follow the law
Managers must act ethically
Duty to correct the adverse social impacts they cause
Comply with the norms of the social contract.
Managers should try to meet the legitimate needs of
Publicly report on market, mandated, and voluntary
Effective abolition of Child Labour
The UN Global Compact asks companies to embrace, support and enact,
within their sphere of influence, a set of core values in the following

Human Rights:
Principle 1: Businesses should support and respect the protection of
internationally proclaimed human rights; and
Principle 2: make sure that they are not complicit in human rights abuses.

Principle 3: Businesses should uphold the freedom of association and the
effective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect of employment
and occupation.

Principle 7: Businesses should support a precautionary
approach to environmental challenges;
Principle 8: undertake initiatives to promote greater
environmental responsibility; and
Principle 9: encourage the development and diffusion of
environmentally friendly technologies.
Principle 10: Businesses should work against corruption
in all its forms, including extortion and bribery.

1. Obstructionist Strategy: Meet Economic
2. Defensive Strategy: Do minimum legally
required meet eco, legal and ethical
3. Accommodative Strategy: Do minimum
ethically required meet eco, legal and ethical
4. Proactive Strategy: take leadership in social
initiatives, meet eco, legal, ethical and
discretionary responsibility.
UN code of Conduct for TNCs
European Convention on Human rights
International covenant on civil and political
UN universal declaration of Human rights
International covenant on Economic Social
and Political Rights

Ethical issues
Workers not well paid (often work 12 hours a day, 7 days a
Piracy of intellectual property, counterfeiting, and industrial
Human rights violations
Use of prisoner and child labor
Political campaign contributions & lobbyists
Fraud in mortgage sector
Attitude of caveat emptor
Rising wage inequality
middle class wages stagnant for a decade
Lack of health benefits for workers
Loss of promised retirement benefits

United States-
International agencies and national
governments have also attempted to lay
down business principles for guidance.

1. Rise of Civil Society Groups
2. Response of TNCs
3. Government Actions
Emergence of organized civil society and
NGOs altered
Business environment globally
Role of MNC within global business environment
NGOs globally
Save the Children
World Wildlife Fund
Conservation International
TNCs generally show a cautious response to
social responsibilities issues.
Some TNCs adopt their own codes of conduct
to address social responsibility
Corporate codes of conduct help to boost
corporate image.
Some TNCs adopt a proactive approach to
CSR on the belief that it is a good business

Govt of various countries take actions on the
basis of international standards or codes.

UN and OECD has laid down guidelines
related to human rights, labor issues and