Corporate

Social
Responsibility

Lecture 1 & 2 MBA 2008 Div C

Dr.BALA
 Norms
• Readings circulated are essential
• Guest lectures: 4 sessions
• One Field Visit to an NGO in Mumbai
• Mid Term :Quiz- 10 Marks
• Poster presentation- 10 Marks based on
field visit
• Project based Oral Presentation-10 Marks
Written Assignment-20-report
• End Term exam : 50 marks
Important Websites

• www.bsr.org Business Social Responsibility

• www.wbcsd.org World Business Council
for Sustainable Development
• www.worldbank.org The World Bank
• www.undp.org United Nations
Development Programme
 Power of Corporations
Corporations have far more power than the nation-
states across whose borders they operate.  

The combined revenues of just The combined sales of

General Motors and Ford -- the Mitsubishi, Mitsui,
two largest automobile ITOCHU, Sumitomo,
corporations in the world -- Marubeni, and Nissho
exceed the combined Gross Iwai. are nearly
Domestic Product (GDP) for all equivalent to the
of sub-Saharan Africa combined GDP of all of
South America

The United Nations has justly described these corporations

as “the productive core of the globalizing world economy.”
•What is a Company?
•What is the role of companies in a
globalized economy?

•To whom are companies/

businesses responsible???
 Globalization
• Globalization is a process of
Interaction and
integration among the
people, companies, and
governments of different
nations
A process driven by
international trade
and investment and
aided by information
technology

It impacts environment, culture, political systems,

economic development and prosperity, and human
physical well-being in societies around the world.
Impact of Globalization

• New job creation

• Globalization of Information and
Communication system : Global village
• Globalization of science leads to the fusion of
scientific data and rules to form a uniform
network of database
• Increase in global awareness about various
economic, legal, political, technical and
cultural aspects
 Self-employment increased in all developing
regions except East and South-east Asia
Figure 15: Non-agricultural self-employment, 1980-89 and 1990-2000
(in per cent of total non-agricultural employment)

48
50
1980/1989
44 44
1990/2000
40

32 32
29
30
26 26

20

13
12

10

0
World Developed Regions Africa Latin America Asia
Source: ILO, Women and men in the informal economy , 2002.
 Current Trends in Globalization
IMBALANCE
•North-South imbalance - unfair rules in Trade and FDI
 Trade: Despite liberalization, expansion did not occur uniformly
 Barriers to market entry for certain products of poor countries
 FDI highly concentrated in about 10 developing countries despite
efforts by many to seek to attract FDI

Capital & goods move more freely than labour & knowledge
Disparities in enterprise competitiveness and labour markets

More than 2 billion people – particularly in sub-Saharan Africa, the

Middle East, and the former Soviet Union – live in countries that
are being left behind.
 China, India,
Bangladesh,
Philippines, Brazil,
Costa Rica, Thailand,

Source: World Bank 2006

 Impact on the Global Markets

More choice but can result in

– Unhealthy lifestyles – lack of activity, risky sexual
behaviour, breakdown in traditional values
– Promotion of processed tobacco, alcohol and
processed food with high salt sugar and fat content
– Unrealised expectations – resulting in depression
– Increased tourism brings risks to health of tourists and
communities
Impact on Global Health
• Health conditions affecting people across
boundaries, culture & generations
– Infectious diseases: HIV/AIDS, TB, Influenza, SARS,
– Lifestyle diseases and conditions: obesity, lung
cancer, heart disease, STDs, Type 2 Diabetes
– Threats to global stability and economy: HIV/AIDS,
SARS.The vectors of these diseases may be– travel or
work place
Impact of Globalization:
Environment
• Threats to the Globe
– Global warming
• Agricultural development and food security
• Water stress and water insecurity
• Rising sea levels and exposure to climate disasters
– Environmental pollution
– Loss of bio diversity
Impact of Globalization on Women.]

• Gender imbalance
• Trade liberalization has wiped out
livelihood sources of women producers
• Migrants particularly women driven to
illegal economy( trafficking) leaving them
vulnerable to exploitation.
Impact of Globalization (Wider Effects)
• Global revolution has impacted culture &
identity---- Values, norms
• Illicit cross border activities-increased tax
evasion, rise in multinational crime syndicates–
money laundering
• Trafficking of human beings
• Rural & Informal economies remain on the
margins resulting in persistent poverty
• Loss of jobs due to industrial restructuring
• Migration leading to “brain-drain”
World increasingly shaped by Sustainable
Development issues

• A carbon constrained world

• A water constrained world
• Issues of sustainable production
• Poverty
CORRECTING THE IMBALANCE

• How to build a fair globalization to reduce

poverty and inequality
Globalisation agenda for action

• Development round –market access

• Improving investment climate
• Strengthening edn, health and empowerment
Social protection
• More and better aid
• Debt relief for reforming countries (HIPC)
• Global collective action ( global warming)
 Millennium Development Goals
• Eradicate extreme poverty and hunger
• Achieve universal primary education
• Promote gender equality and empower
women
• Reduce child mortality
• Improve maternal health
• Combat HIV/AIDS, malaria, and other
diseases
• Ensure environmental sustainability
• Develop a global partnership for development
Adverse Effects of Globalization Can be Controlled

Human Rights
Principles of
social equity
democracy

Smart
Partnerships
Respect the Law
between State
and
Businesses
 Need for Intervention of Business for Sustainable
Development

• If business has to be developed, the society needs to be

developed, business sector cannot flourish in any
country, if the environment required by business is not
conducive.

• Increasing social issues impacts the entire society in

general and business in particular because to a large
extent business is dependent on the society for its
growth and prosperity.
Need for Intervention of Business for Sustainable
Development

• The most fundamental impact on society is from

technological and social change.

• Creation of new cultural and social attitudes

• New set of relationships between the business firm and the

surrounding society.

• Stakeholders, who have long remained dormant, have stirred

awake and are now proving themselves as major forces to be
reckoned with.
 
Need for Intervention of Business for
Sustainable Development

• Challenges in the 21st Century cannot be tackled

by yesterday’s rule of governance.
• There is a need to develop new ways of thinking
and new approaches to governance at every
level of society.
• It is an accepted fact, that, there are crucial
linkages between economic growth, human
development, social cohesion and environmental
sustainability.