Corporate Social Responsibility final

1

Summer Training Project Report

On

―

Comparative study on Corporate Social responsibility activities of

Godfrey Phillips India Ltd. and other major Indian players‖

At

CLEA PUBLIC RELATIONS

Under The Supervision

of

Ms. Shobha Soman

(Vice President CLEA PR & Major Coordinator Godfrey Phillips Bravery

Awards)

Submitted in partial fulfilment of the requirement for the award of the degree of

Master of Business Administration

By

Ekta Makhija

(09 MBA-34)

Department Of Business Administration

Faculty of Management Studies and Research

Aligarh Muslim University, Aligarh

2

Acknowledgement

An undertaking of work life, this is never an outcome of a single person; rather it bears the imprints of a number of people who directly or indirectly helped me in completing the present study. I would be failing in my duties if I don‘t say a word of thanks to all those who made my training period educative and pleasurable one.

I am thankful to CLEA PUBLIC RELATIONS, New Delhi, for giving me an opportunity to do summer training in the company. I have gained enriching experiences, learned a lot and become more matured as an individual.

I am deeply indebted to my project guide Ms. Shobha Soman (Vice President, CLEA PR and Major Coordinator, Godfrey Phillips Bravery Awards), for giving me her valuable time, advice, guidance, encouragement and help during the course of my project.

My heart full thanks to Ms.Amisha Gutgutia (Senior Manager) and the whole staff of Clea Public Relations who gave me continuous support in every possible manner to gain practical knowledge in Industry.

My very special thanks to Mr. Danish AG ( Managing Director, Middle East, North Africa, & Levant, Drive Dentsu Inc.) who arranged this project for me and has guided me through out as a mentor.

Finally I would like thank all lecturers, friends and my family for the kind of support and to all who directly or indirectly helped me in preparing this project report.

And at last I am thankful to all divine light and my parents, who kept my Motivation and zest for knowledge always high through the tides of time.

Date: July 23, 2010

3

Table of Contents

Page

Chapter 1:

Chapter 2: Literature review

 Corporate Social Responsibility 13-29

 Women Empowerment 30-34

Chapter 3: Company Profile

Chapter 4: Case studies

 Tata Group 45-54

 Airtel 55-57

 Bajaj 58-60

 Hindustan Unilever Ltd. 61-65

 Indian Tobacco Company 66-70

 Godfrey Phillips India 71-75

 IndianOil Corporation 76-80

Chapter 5:

Analysis & Interpretation

 Comparison 82-88

 Number of initiatives and Financial Outlay 89

4

Chapter 6: Godfrey Phillips Bravery Awards

 Bravery Awards 92-102

 Cases for Amodini Awards 103-116

Chapter 7

 Findings 118-120

 Recommendations 121-122

 Limitations 123

5

Executive Summary

Introduction:

I did my summer training in CLEA Public Relations, New Delhi. It is a Public Relations agency of repute and has some big names in its client list like Ashok Leyland, Hinduja Group, ITC, Baccarose, French Connection, Nike, Calvin Klein, Godfrey Phillips India ltd etc. I was given a project for one of its clients i.e. Godfrey Phillips India ltd. I did my project under the kind supervision of Ms. Shobha Soman who is the vice President of CLEA Public Relations as well as a Major Coordinator of Godfrey Phillips Bravery Awards.

Corporate Social Responsibility:

There is little consensus on the definition of CSR. A useful pointer is provided by the UK Department for Trade and Industry who define CSR as a company‘s response to the issues on the sustainable development agenda. Sustainable development can be further defined as comprising the social, environmental and economic agendas (sometimes called the triple bottom line). The reason for sustainable development has been classically stated in the Brundtland Report as ―meeting the needs of the present without compromising the choices available for the needs of the future‖. But why should this matter to business? What are the business drivers to take on the agenda?

The World Business Council for Sustainable Development (WBCSD) defines CSR as ―The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the work force and their families as well as of the local community and society at large.‖

In KPMG's International Survey of Corporate (Social) Responsibility Reporting 2005, which surveyed more than 1,600 companies worldwide and documented the top ten motivators driving corporations to engage in CSR for competitive reasons, the following emerged: Economic

considerations

,

,

,

,

,

,

,

,

6

Objective:

The main objective of this report is to study the Corporate Social Responsibility in India and then to do a comparative study on CSR activities of Godfrey Phillips India ltd and other major Indian players doing CSR, with focus on Women Empowerment and on the basis of that I had to recommend further strategies to Godfrey Phillips India to improve its CSR activities to hold its vision to be a socially responsible corporate citizen and to reach up to the level of leaders.

Methodology:

A detailed search was conducted in business journals, market research sites, business newspapers, and publications to study CSR activities, CSR strategy, etc of various leading Indian companies. This was followed by comparing these leading companies across sectors with the selected benchmark of the Tata group of companies (Indian Leadership Company). The companies reviewed are Tata, Bajaj, Hindustan Unilever, Airtel, IndianOil Corporation, ITC and Godfrey Phillips India.

Analysis:

Community Environment Education Health

GPI ITC HUL Airtel IOC Bajaj Tata

High Medium Low

The companies have been ranked high, medium or low based on their focus as reflected by the financials and organizational resources devoted to CSR causes, along with the number and size of initiatives.

7

Findings:

 Godfrey Phillips India has been very consistent in its efforts in the field of Community initiatives, since beginning. Since the size of the company does not allow it to take the initiatives on a massive scale so the company is extending its activities gradually like the bravery awards initially covered 12 states but now it covers a total of 16 states. Similarly, the Godfrey Phillips bravery awards started only in one category i.e. Physical Bravery but now it has five categories of awards namely ‗Physical Bravery Award‘, ‗Social Bravery Award‘, ‗Mind of Steel Award‘, ‗The Social Lifetime Achievement Award‘, ‗The Amodini Award‘.

 Godfrey Phillips is one of those very few companies which have an entire CSR team to develop and implement CSR programmes. Earlier the company had only three members in this team and presently it has a dedicated CSR team of seven people.

 Godfrey Phillips India is the only company which is contributing 10% of its total profits on CSR which is the highest among all the companies studied.

 Comparing the initiatives of Godfrey Phillips with other companies under study it is found that though the initiatives taken by company are less in number and are not taken on a very massive scale due to the size of the company yet most of its initiatives are unique like Blood donation drive and its project Godfrey Phillips White, the essence of WHITE is - 'It Honours the Importance of Tobacco Etiquette', responsible smoking programme by Godfrey Phillips India, a first of its kind initiative in India. The key focus is on cultivating smoking etiquette among smokers - to respect non-smokers' space.

 GPI has more focus on community welfare and especially on women empowerment. However, Company‘s focus on environment is relatively low and company is not taking any initiative in the field of education.

 On comparing the activities of Godfrey Phillips with its competitor ITC, it is seen that both the companies are taking high number of community initiatives, with a high level of involvement as well. However if the initiatives of the two are compared in the light of the vast difference that exist in terms of revenue, profits, product portfolio and size of the companies then it is found that Godfrey Phillips is more involved in CSR activities.

8

 It was found that most of the companies do not reveal their CSR expenditure in their annual reports which is otherwise necessary to publish.

 Out of the 8 companies studied, currently only three companies viz. Godfrey Phillips, Bajaj and Hindustan Unilever have a high focus on Women empowerment.

Recommendations:

 Almost all of the companies are investing in economic empowerment of women. However empowerment is more than just economic. It also includes Political, Legal, Social and Psychological components. Hence this is a field where GPI can take a lead.

 The Godfrey Phillips Bravery Awards do not cover state of J&K, However as per a survey the highest number of women entrepreneurs exist in this state alone. So, the company can include this state from next year.

 Environment is one field where GPI has to invest more because being a tobacco company its responsibility towards environment becomes more.

 Since the size and the revenue of the company is not so large as compare to the other companies so In order to expand its activities further with a relatively low budget, the company should try to identify regional problems and devise state-specific solutions to do CSR work.

 Godfrey Phillips does not publish its separate Annual CSR report while it is recommended by the Indian Government. So, the company should publish its CSR report to conform to the International Standards set for the companies. This will also be a document for good PR as well as morale booster for its employees.

 Company can also allow the rural women to come and showcase their talent by setting up counters at the Bravery Awards function organised by the company.

9

 GPI can launch some projects where it connects unemployed designers graduating from B tier institutes with these rural women. These designers can help these women to polish their skills, making products which are in demand and in marketing aspect of these products.

 GPI can also provide its own show rooms to these NGOs to sell their products and for better marketing GPI can itself take this responsibility of marketing the quality products made by the rural women.

 There is no set procedure for selecting candidates for Amodini Awards yet, like in case of Physical Bravery Awards, Mind of Steel Award and Social Act of Courage. The selection for this category of award is done on ad hoc basis, so there is a need of developing a proper procedure for selecting candidates for these awards as well to make it more transparent.

10

Research Methodology

Problem Statement:

―To do a comparative study on CSR activities of Godfrey Phillips India ltd. and other major Indian players doing CSR‖

Objective:

The main objective of this report is to study the Corporate Social Responsibility in India and then to do a comparative study on CSR activities of Godfrey Phillips India ltd and other major Indian players doing CSR, with focus on Women Empowerment and on the basis of that I had to recommend further strategies to Godfrey Phillips India to improve its CSR activities to hold its vision to be a socially responsible corporate citizen and to reach up to the level of leaders.

Sub Objective:

My sub objective was to study women empowerment as a Corporate Social Responsibility initiative in detail and then as a part of a live project I was given the task of identification of women candidates who can be considered for Amodini Awards,2010 (Godfrey Phillips Bravery Awards in field of Women Empowerment)

Nature Of Data:

This study is based upon the theoretical information and the data used at some place to support the information or argument is secondary in nature. So there is no primary data used.

Research type:

This research is Qualitative in nature.

Methods of Data Collection:

 An initial search was conducted within the public domain to review the CSR reported practice of large Indian corporations, which are acknowledged to be at the forefront of the

11 engine of economic growth in India. This was established through selecting leading growth sectors and reviewing the leading company in each sector.

 To augment this, a detailed search was conducted in business journals, market research sites, business newspapers, and publications to study their CSR activities, CSR strategy and identify metrics used by them (if any).

 This was followed by comparing these leading companies across sectors with the selected benchmark of the Tata group of companies (Indian Leadership Company)

 And finally a separate comparison was done between the CSR activities of Godfrey Phillips India and rest of the companies under study.

The companies reviewed are:

 Benchmark: Tata

 Two-wheelers: Bajaj

 Rural Marketing: Hindustan Unilever

 Telecom: Airtel

 Oil and Gas: IOC

 Tobacco : ITC and Godfrey Phillips

Process of selecting the women candidates for Amodini Awards:

There were two phases of the research:

 A detailed search was conducted in various local and national newspapers, and publications, magazines, webzines, websites etc to pick out the relevant stories.

 Then it was followed by the process of locating these people by contacting various Local organisations, editors of various newspapers etc. for further identification, verification and nomination etc.

12

Chapter 1:

13

Corporate Social Responsibility

Introduction:

The broad rationale for a new set of ethics for corporate decision making, which clearly constructs and upholds a organization's social responsibility, arises from the fact that a business enterprise derives several benefits from society, which must, therefore, require the enterprise to provide returns to society as well. This, therefore, clearly establishes the stake of a business organization in the good health and well being of a society of which it is a part. More importantly, in this age of widespread communication and growing emphasis on transparency, the managers should help their company in development of a CSR management and reporting framework.

The more the concepts of CSR are fostered and integrated into the business process, the easier it will be to benefit from alternative thinking and perhaps handle the occasional problems that for certain will occur. The more integrated the business process within the value chain, the more opportunity there will be for organizations to influence the approaches of others on whom they depend. The concept of CSR includes the openness or transparency of companies as well as taking into consideration the will and expectations of their stakeholders.

Social responsibility means a doctrine that claims that an entity whether it is government, Private Corporation or public organization has a responsibility to society. CSR is a concept that reduces costs and risks, increases the brand value and reputation, effectiveness and the efficiency of employees, improves transparency, and clarity in the working environment of the business house.

Background:

The role of corporates by and large has been understood in terms of a commercial business paradigm of thinking that focuses purely on economic parameters of success.

As corporates have been regarded as institutions that cater to the market demand by providing products and services, and have the onus for creating wealth and jobs, their market position has traditionally been a function of financial performance and profitability. However, over the past few years, as a consequence of rising globalisation and pressing ecological issues, the perception of the

14 role of corporates in the broader societal context within which it operates, has been altered. Stakeholders (employees, community, suppliers and shareholders) today are redefining the role of corporates taking into account the corporates‘ broader responsibility towards society and environment, beyond economic performance, and are evaluating whether they are conducting their role in an ethical and socially responsible manner. As a result of this shift (from purely economic to ‗economic with an added social dimension‘), many forums, institutions and corporates are endorsing the term Corporate Social Responsibility (CSR).

They use the term to define organisation‘s commitment to the society and the environment within which it operates. The World Business Council on Sustainable Development‘s (WBCSD) report was titled Corporate Social Responsibility: Making Good Business Sense and the OECD Guidelines for 1 Multi-National Enterprises which includes a discussion on how CSR is emerging as a global business standard. Further, there is a global effort towards reinforcing CSR programmes and initiatives through local and international schemes that try to identify best-in-class performers.

CSR: A Historical Perspective:

In early 1950's & 60's the literature was not heavily represented in CSR discourse. However, this decade 'marked a significant growth in attempts to formalize, or more accurately, state what CSR means' (Carroll, 1999). According to Carroll, "CSR encompasses the economic, legal, ethical and discretionary (philanthropic) expectations that society has of organizations at a given point in time."

Some of the most prominent writers during that time were Keith Davis, Joseph W McGuire, William C Frederick and Clarence C Walton. Frederick wrote that ―Social responsibility in the final analysis implies a public posture toward society's economic and human resources and a willingness to see that those resources are used for broad social ends and not simply for the narrowly circumscribed interests of private persons and firm‖ (Carroll 1999)

Howard Bowen in 1953 argued that since social institutions shaped economic outcomes it was to be expected that business firms as an economic outcome of societal interests should consider the social impact of business activity. According to Bowen, ―CSR refers to the obligations of businessmen to pursue those policies to make those decisions or to follow those lines of relations which are desirable in terms of the objectives and values of our society.‖ CSR implies some sort of commitment, through corporate policies and action. This operational view of CSR is reflected in a firm's social performance, which can be assessed by how a firm manages its societal relationships, its social

15 impact and the outcomes of its CSR policies and actions (Wood, 1991). Social reporting and social audits are examples of how firms can assess their social performance. In 1960's Keith Davies argued that CSR refers to ―the firm's consideration of, and response to, issues beyond the narrow economic, technical and legal requirements of the firm‖ (Davies, 1973). Frederick 1960 stated ―Social responsibility means that businessmen should oversee the operation of an economic system that fulfils the expectations of the people. And this means in turn that the economy's means of production should be employed in such a way that production and distribution should enhance total socio-economic welfare‖ (Fredrick, 1960). Thus, the definitions of CSR in 1960's were an attempt to link society and businesses, defining society in broadest terms.

In 1970's there was one and only one social responsibility of business--to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engage in open and free competition, without deception or fraud. The idea and inclusion of stakeholder began to appear. Harold Johnston 1971 stated that ―a socially responsible firm is one whose managerial staff balances a multiplicity of interests instead of striving only for larger profits for its stockholders. A responsible enterprise also takes into account employees, suppliers, dealers, local communities, and the nation.‖ Carroll 1979 offered the following definition of CSR ―The social responsibility of business encompasses the economic, legal, ethical, and discretionary (or philanthropic) expectations that society has of organizations at a given point in time‖ (Turner, 2006). European Commission described CSR as ―a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.‖ World Business Council for Sustainable Development defined CSR as ―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.‖

In 80s & 90s there were fewer definitions but more efforts to measure and conduct research for the purpose of operationalizing CSR. New concepts which were closely related to CSR were introduce; stakeholder theory, business ethics, corporate governance, responsiveness, corporate social performance, and corporate citizenship. These concepts are closely related but not identical. Lee 1997 stated ―CSR refers to a company's commitment to operate in an economically and environmentally sustainable manner, while acknowledging the interests of a variety of stakeholders and maximizing economic, social and environmental value.‖ It is holistic concept that can mean different things to different groups and stakeholders. Gray, Owen, & Maunders in 1987 defined CSR as ―the process of communicating the social and environmental effects of organizations

16 economic actions to particular interest groups within society and to society at large.‖ Similarly, Perks 1993 defined corporate social reporting as ―the disclosure of those costs and benefits that may or may not be quantifiable in money terms arising from economic activities and substantially borne by the community at large or other stakeholders.‖

A term 'corporate social innovation' was first introduced by Rosabeth Moss Canter in 1999 who argues that firms should use social issues as a learning laboratory for identifying unmet needs and for developing solutions that create new markets. Large corporations began to go public about corporate social responsibilities and publish some of their efforts, but they also made public that ―any approach to corporate responsibility must begin with the practical recognition that the corporation must be profitable enough to provide shareholders a return that will encourage continuation of investment‖ (Wilson, 2000). Another trend appearing in literature is the increasing dialogue between stakeholders. Companies are augmenting their discussions with labor unions, environmental groups and other relevant stakeholders and the implementation of certification solutions by corporations, which is the establishment of codes of conduct (Kapstein, 2001), monitoring and reporting. Kingston and Wagner 2004 suggest that leadership on sustainability and CSR are important to set priorities and to ensure that commitments are achieved.

Bebbington et al.(2008) use the term CSR reporting, which highlights the link between the reporting function and the organizational functions and operations that are concerned with, and impacted by, activities associated with CSR. CSR and CSR (or sustainability) reporting are inextricably intertwined across an organization, and at various levels, impact on strategic planning, governance, stakeholder engagement, risk management, decision making, data collection and management systems, performance measurement, performance management, public relations and communications. The CSR movement was an early response to an article published in 1970 by Friedman stating that 'social responsibility of business is to increase its profits'. CSR has emerged as the business issue of the 21st century and has been studied for over 50 years. To this day academics do not have a consensus on its definition (Wood, 1991; Carroll, 1991). Bowen's definition of social responsibility of businessmen was ―it refers to the obligations of businessmen to pursue those policies to make those decisions, or to follow those lines of relations which are desirable in terms of the objectives and values of our society‖ (Carroll, 1999). Due to Bowen's concern with social responsibility and his leadership role in the topic, Bowen should be seen as father of CSR.

17 The main drivers for CSR have been the shrinking role of government, demands for greater disclosure, increased customer interest, growing investor pressure, competitive labour markets, and supplier relations. The companies enjoy several benefits like improved financial performance, lower operating costs, enhanced brand image and reputation, increased sales and customer loyalty, product safety, material recyclability, and greater use of renewable resources etc.

Codes / Standards / Principles on CSR:

 Universal Declaration of Human Rights: Adopted by United Nations, this declaration paved way for many international human rights standards for all sectors entities.

 UN Global Compact: An international multi-constituent, voluntary initiative based on internationally accepted ten principles in pursuit of a more sustainable inclusive global economy. The ten principles covers human rights forced labor, child labor, environmental challenges and responsibility, non discrimination, freedom of associations, collective bargaining, corruption, etc. Global Reporting Initiative (GRI): Since its founding in 1997, the GRI has been addressing the need for standardized approaches to corporate sustainability reporting. In 2006, GRI published Version 3.0 (G3) of its Sustainability Reporting Guidelines emphasizing performance indicators, which contain a separate section titled "Human Rights" with nine performance indicators.

 Organization for Economic Co-operation and Development (OECD): OECD guidelines contains recommendations on core labor, environmental standards, human rights, competition, taxation, science and technology combating corruption and safe guarding, consumer rights.

 Social Accountability 8000: 'SA 8000' standard for social accountability, created in 2000 by the Council on Economic Priorities Accreditation Agency (CEPAA). SA8000 developed by an international coalition of businesses, trade unions and non-governmental organizations (NGOs) on the basis of International Labor Organization (ILO) conventions--the Universal Declaration of Human Rights and the UN convention on the Rights of the Child. The SA8000 code of practice is broken down into nine key areas child labor, management systems,

18 working hours, compensation, disciplinary practices, forced labour, health & safety, freedom of association & collective bargaining and discrimination.

 Principles for Responsible Investment (PRI): A set of global best practice principles for responsible investment. It provides a framework for achieving better long term investment returns and more sustainable markets.

 Equator Principle: Equator principle is a set of environmental and social benchmarks for managing environmental and social issues in development project finance globally. They were developed by private sector banks-led by Citigroup, ABN AMRO, Barclays and WestLB and were launched in June 2003.

 Role of International Labor Organization (ILO): ILO seeks the promotion of social justice and internationally recognized human and labor rights. It formulates international labor standards in the form of conventions and recommendations setting minimum standards of basic labor rights. International Organization for Standardization (ISO) 26000: ISO an International Standard setting body is developing a new standard on Social Responsibility namely ISO 26000 to be published in Nov., 2009. ISO 26000 is intended for use by all types of organizations and in all countries and to assist organization to operate in a socially responsible manner.

 Occupational Health & Safety Advisory Services (OHSAS) Standard: OHSAS 18001 is applicable to any organization which aims to establish a health and safety management system at work.

CSR in India:

India has a long rich history of close business involvement in social causes for national development. In India, CSR is known from ancient time as social duty or charity, which through different ages is changing its nature in broader aspect, now generally known as CSR. From the origin of business, which leads towards excess wealth, social and environmental issues have deep roots in the history of business. India has had a long tradition of corporate philanthropy and industrial welfare has been put to practice since late 1800s. Historically, the philanthropy of business people in India has resembled

19 western philanthropy in being rooted in religious belief. Business practices in the 1900s that could be termed socially responsible took different forms: philanthropic donations to charity, service to the community, enhancing employee welfare and promoting religious conduct. Corporations may give funds to charitable or educational institutions and may argue for them as great humanitarian deeds, when in fact they are simply trying to buy community good will. The ideology of CSR in the 1950s was primarily based on an assumption of the obligation of business to society.

In initial years there was little documentation of social responsibility initiatives in India. Since then there is a growing realization towards contribution to social activities globally with a desire to improve the immediate environment (Shinde, 2005). It has also been found that to a growing degree companies that pay genuine attention to the principles of socially responsible behaviour are also favoured by the public and preferred for their goods and services. This has given rise to the concept of CSR.

After Independence, JRD Tata who always laid a great deal of emphasis to go beyond conducting themselves as honest citizens pointed out that there were many ways in which industrial and business enterprises can contribute to public welfare beyond the scope of their normal activities. He advised that apart from the obvious one of donating funds to good causes which has been their normal practice for years; they could have used their own financial, managerial and human resourced to provide task forces for undertaking direct relief and reconstruction measures. Slowly, it began to be accepted, at least in theory that business had to share a part of the social overhead costs of. Traditionally, it had discharged its responsibility to society through benefactions for education, medical facilities, and scientific research among other objects. The important change at that time was that industry accepted social responsibility as part of the management of the enterprise itself. The community development and social welfare program of the premier Tata Company, Tata Iron and Steel Company was started the concepts of "Social Responsibility." (Gupta, 2007)

The term corporate social performance was first coined by Sethi (1975), expanded by Carroll (1979), and then refined by Wartick and Cochran (1985). In Sethi's 1975 three-level model, the concept of corporate social performance was discussed, and distinctions made between various corporate behaviours. Sethi's three tiers were 'social obligation (a response to legal and market constraints); social responsibility (congruent with societal norms); and social responsiveness (adaptive, anticipatory and preventive) (Cochran, 2007).

The last decade of the twentieth century witnessed a swing away from charity and traditional philanthropy towards more direct engagement of business in mainstream development and concern

20 for disadvantaged groups in the society. This has been driven both internally by corporate will and externally by increased governmental and public expectations (Mohan, 2001). This was evident from a sample survey conducted in 1984 reporting that of the amount companies spent on social development, the largest sum 47 percent was spent through company programs, 39 percent was given to outside organizations as aid and 14 percent was spent through company trusts (Working Document of EU India CSR, 2001). In India as in the rest of the world there is a growing realization that business cannot succeed in a society which fails. An ideal CSR has both ethical and philosophical dimensions, particularly in India where there exists a wide gap between sections of people in terms of income and standards as well as socio-economic status (Bajpai, 2001).

According to Infosys founder, Narayan Murthy, ―social responsibility is to create maximum shareholders value working under the circumstances, where it is fair to all its stakeholders, workers, consumers, the community, government and the environment.‖ Commission of the European Communities 2001 stated that being socially responsible means not only fulfilling legal expectations, but also going beyond compliance and investing 'more' into human capital, the environment and the relation with stakeholders(Bajpai, 2001).

According to ―Altered Images: the 2001 State of Corporate Responsibility in India Poll‖, a survey conducted by Tata Energy Research Institute (TERI), the evolution of CSR in India has followed a chronological evolution of 4 thinking approaches:

 Ethical Model (1930 –1950): One significant aspect of this model is the promotion of ―trusteeship‖ that was revived and reinterpreted by Gandhiji. Under this notion the businesses were motivated to manage their business entity as a trust held in the interest of the community. The idea prompted many family run businesses to contribute towards socioeconomic development. The efforts of Tata group directed towards the well being of the society are also worth mentioning in this model.

 Statist Model (1950 –1970s): Under the aegis of Jawahar Lal Nehru, this model came into being in the post independence era. The era was driven by a mixed and socialist kind of economy. The important feature of this model was that the state ownership and legal requirements decided the corporate responsibilities.

21

 Liberal Model (1970s –1990s): The model was encapsulated by Milton Friedman. As per this model, corporate responsibility is confined to its economic bottom line. This implies that it is sufficient for business to obey the law and generate wealth, which through taxation and private charitable choices can be directed to social ends.

 Stakeholder Model (1990s – Present): The model came into existence during 1990s as a consequence of realisation that with growing economic profits, businesses also have certain societal roles to fulfill. The model expects companies to perform according to ―triple bottom line‖ approach. The businesses are also focusing on accountability and transparency through several mechanisms.

CSR needs to be understood within this context captured in the development oriented CSR framework given below:

Model Focus Champions

Ethical Voluntary commitment by companies to public welfare

M.K. Gandhi

Statist State ownership and legal requirements determine Corporate responsibility

Jawahar Lal Nehru

Liberal Corporate responsibilities limited to private owners (Shareholders)

Milton Friedman

Stakeholder Companies respond to the needs of stakeholders-customers, employees, communities, etc.

R. Edward Freeman

CSR Initiatives in India:

 Industry Association Initiative: Leading Chambers of Commerce and Industry of India are traditionally active in social and environmental norms. Federation of Indian Chambers of Commerce and Industry (FICCI), CII works closely in partnership with Government. CII in partnership with UNDP set up India Partnership Forum to promote multi stakeholders approach to CSR. Social Development Council (SDC) set up by CII, ensures corporate participation in social development and provides an institutional base for social activities of

22 the corporate sector. Progress, Harmony and Development chambers of commerce and Industry (PHDCCI) has major interventions in family welfare and rural development. Associated Chambers of Commerce and Industry of India (ASSOCHAM) through their members provided drinking water in 110 villages by 1996 on occasion of its platinum Jubilee. Bombay Chambers of Commerce and Industry (BCCI) have been consistently on issues of populations and civic conditions in Mumbai.

 Company Initiatives: An internet-based survey was conducted to understand the philosophy & deployment of CSR as practiced (innovatively and in a sustained manner) for National and International organizations.

 Roundtables and Networks in India: Corporate Roundtable on Development of Strategies for the Environment and Sustainable Development--Business Council for Sustainable Development (CoRE-BCSD) of India is a grouping of Indian corporate trying collectively and individually to build in sustainable development concepts into their operations. The British Council's CSR Network: Towards promoting CSR and generating awareness and interest amongst young future business leaders.

 CSR Surveys: In the context of India, CSR studies were few and limited. Singh and Ahuja 1983 conducted the first study in India on CSR of 40 Indian public sector companies for the years 1975-76 and found that 40 percent of the companies disclosed more than 30 percent of total disclosure items included in their survey. Raman (2006) used content analysis technique to examine the chairman's message section in the annual reports of the top 50 companies in India to identify the extent and nature of social reporting. This study concluded that the Indian companies placed emphasis on product improvements and development of human resources (Raman, 2006). According to a survey done by Partners in Change 2000, which covered 600 companies and 20 CEOs for judging Corporate Involvement in Social Development in India 85 percent agreed that companies need to be socially responsible; only 11 percent companies had a written policy; over 60 percent of the companies were making monetary donations; health, education and infrastructure were most supported issues.

From 2000 onwards, 4 important surveys have been conducted, which give significant macro level conclusions about Indian corporate. The first and second surveys were carried out in 2001 and 2002 by Business Community Foundation for TERI-Europe. The survey

23 sought to explore the perception of workers, company executives and general public about social, economic and environmental responsibilities. It was found that all companies irrespective of size or sector have awareness of CSR and its potential benefits. Many companies were collaborating with NGOs, have labour and environmental policy guidelines in place.

A third survey was jointly conducted in 2002 by CII, United Nations Development Program (UNDP), British Council (BC) and Price Water Coopers (PWC). The most striking features of the responses to the survey is that the respondents are in near unanimity that CSR is very much a part of the domain of corporate action and the passive philanthropy is no longer sufficient. A significant proportion of respondents, recognize CSR as the mean to enhance long-term stake holder value.

The fourth survey, the Karmyog CSR rating 2007-08 is for the largest 500 companies. Karmayog is a platform for the Indian non-profit sector providing research on CSR activities of Indian companies. It rated the 500 largest Indian Companies based on their CSR activities. The companies were rated on 0 to 5 levels based on criteria's like products & services, reach of CSR activities, expenditure on CSR, harmful processes etc.

CSR: Definitions

The totality of CSR can be best understood by three words: ‗corporate,‘ ‗social,‘ and ‗responsibility.‘ In broad terms, CSR relates to responsibilities corporations have towards society within which they are based and operate, not denying the fact that the purview of CSR goes much beyond this. CSR is comprehended differently by different people.

Some perceive it to be a commitment of a company to manage its various roles in society, as producer, employer, customer and citizen in a responsible manner while for others it is synonymous to Corporate Responsibility (CR) or Corporate Citizenship or Social Action Programme (SAP). Of late, the term has also been started to link up with Triple Bottom Line Reporting (TBL) which essentially measures an enterprise‘s performance against economic, social and environmental indicators.

Discourses on CSR suggest that many definitions of CSR exist within the business community, and CSR continues to be an evolving concept, with no single definition that is universally accepted.

Given below are three key definitions that have garnered wide acceptance and favour amongst business circles:

24

 Definition # 1: Philip Kotler and Nancy Lee (2005) define CSR as “a commitment to improve community well being through discretionary business practices and contributions of corporate resources” whereas Mallen Baker refers to CSR as “a way companies manage the business processes to produce an overall positive impact on society.”

 Definition # 2: According to World Business Council for Sustainable Development “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”.

 Definition # 3: Archie Carroll in 1991 describes CSR as a multi layered concept that can be differentiated into four interrelated aspects – economic, legal, ethical and philanthropic responsibilities. Carroll presents these different responsibilities as consecutive layers within a pyramid, such that ―true‖ social responsibility requires the meeting of all four levels consecutively. The model probably is the most accepted and established.

While the definitions of CSR may differ, there is an emerging consensus on some common principles that underline CSR:

25

 CSR is a business imperative: Whether pursued as a voluntary corporate initiative or for legal compliance reasons, CSR will achieve its intended objectives only if businesses truly believe that CSR is beneficial to them.

 CSR is a link to sustainable development: businesses feel that there is a need to integrate social, economic and environmental impact in their operation; and

 CSR is a way to manage business: CSR is not an optional add on to business, but it is about the way in which businesses are managed.

CSR: A Commonly Misunderstood Concept

In the absence of a universally accepted definition for CSR, there are some myths that surround the concept:

 Myth # 1: Businesses invest the money; therefore they decide the modus operandi of the CSR initiative.

There is a notion that since businesses invest money in society, they are the one who will be deciding upon the modus operandi of the CSR initiative. However this is not true. CSR driven by the mandate of an enterprise alone may not generate desired results. Stakeholders must be involved from the onset in defining an initiative to make it successful. Corporates must not assume that they understand the needs of a community by taking them at face value; stakeholder‘s needs must be considered within the local context and culture.

 Myth # 2: Financial resources alone can meet CSR needs of an enterprise.

In fact, financial resources are only part of the equation. Besides financial resources, it is equally or even more important for the CSR programmes to be well defined and well accompanied by adequate human resources if they are to meet the intended objectives.

 Myth # 3: CSR is interchangeable with corporate sponsorship, donation or other philanthropic activities.

The focus of responsible business practices in the profit sector is hitherto largely confined to community charity-based projects. While this may have been relevant for the historical

26 context in the mid-90s when Carroll‘s definition was coined, the current thinking of CSR has moved beyond philanthropy to in fact encompass all internal and external segments of business operations: employees, market environment and community.

CSR: Rationale

The rationale for CSR has been articulated in a number of ways. In essence, it is about building sustainable businesses, which need healthy economies, markets and communities. The major reasons for CSR can be outlined as:

 Globalisation: As a consequence of cross-border trade, multinational enterprises and global supply chains, there is an increased awareness on CSR concerns related to human resource management practices, environmental protection, and health and safety, among other things. Reporting on the CSR activities by corporates is therefore increasingly becoming mandatory. In an increasingly fast-paced global economy, CSR initiatives enable corporates to engage in more meaningful and regular stakeholder dialogue and thus be in a better position to anticipate and respond to regulatory, economic, social and environmental changes that may occur.

There is a drive to create a sustainable global economy where markets, labour and communities are able to function well together and companies have better access to capital and new markets.

Financial investors are increasingly incorporating social and environmental criteria when making decisions about where to place their money, and are looking to maximise the social impact of the investment at local or regional levels.

 International Legal Instruments and Guidelines: In the recent past, certain indicators and guidelines such as the SA8000, a social performance standard based on International Labour Organization Conventions have been developed. International agencies such as United Nations and the Organization for Economic Co-operation and Development have developed compacts, declarations, guidelines, principles and other instruments that set the tone for social norms for organisations, though these are advisory for organisations and not mandatory.

27

One of the United Nations Millennium Development Goals calls for increased contribution of assistance from country states to help alleviate poverty and hunger, and states in turn are advising corporates to be more aware of their impact on society. In order to catalyze actions in support of the MDGs, initiatives such as Global Compact are being put in place to instrumentaliseCSR across all countries.

As the world‘s largest, global corporate citizenship initiative by the UN, the Global Compact, a voluntary initiative is concerned with building the social legitimacy of business.

The Global Compact is a framework for businesses that are committed to aligning their business operations and strategies with ten universally accepted principles that postulate that companies should embrace, support and enact, a set of core values in the areas of human rights, labour standards, the environment, and anti-corruption.

 Changing Public Expectations of Business: Globally companies are expected to do more than merely provide jobs and contribute to the economy through taxes and employment. Consumers and society in general expect more from the companies whose products they buy. This is coherent with believing the idea that whatever profit is generated is because of society, and hence mandates contributing a part of business to the less privileged.

Further, separately in the light of recent corporate scandals, which reduced public trust of corporations, and reduced public confidence in the ability of regulatory bodies and organisations to control corporate excess.

This has led to an increasing expectation that companies will be more open, more accountable and be prepared to report publicly on their performance in social and environmental arenas.

 Corporate Brand: In an economy where corporates strive for a unique selling proposition to differentiate themselves from their competitors, CSR initiatives enable corporates to build a stronger brand that resonates with key external stakeholders – customers, general public and the government.

Businesses are recognising that adopting an effective approach to CSR can open up new opportunities, and increasingly contribute to the corporates‘ ability to attract passionate and committed workforces.

Corporates in India are also realising that their reputation is intrinsically connected with how well they consider the effects of their activities on those with whom they interact. Wherever

28 the corporates fail to involve parties, affected by their activities, it may put at risk their ability to create wealth for themselves and society.

Therefore, in terms of business, CSR is essentially a strategic approach for firms to anticipate and address issues associated with their interactions with others and, through those interactions, to succeed in their business endeavours. The idea that CSR is important to profitability and can prevent the loss of customers, shareholders, and even employees is gaining increasing acceptance. Further, CSR can help to boost the employee morale in the organisation and create a positive brand-centric corporate culture in the organisation. By developing and implementing CSR initiatives, corporates feel contented and proud, and this pride trickles down to their employees.

The sense of fulfilling the social responsibility leaves them with a feeling of elation. Moreover it serves as a soothing diversion from the mundane workplace routine and gives one a feeling of satisfaction and a meaning to their lives.

Benefits of doing CSR:

According to a global study by CSR network, a UK based CSR consultancy, released in 2004, the top 10 benefits of engaging in Corporate Social Responsibility are:

Increased profit

 Access to capital

 Reduced operating costs/increased operational efficiency

 Enhanced brand image and reputation

 Increased sales and customer loyalty

 Increased productivity and quality

 Increased ability to attract and retain employees

 Potentially, reduced regulatory oversight

 Reducing risk, and increased risk management

 ‗Keeping up‘ with competitors and where the market is

Measurability and emerging metrics – Triple Bottom Line (TBL)

An increasing number of companies are adopting a new way of operationalizing the intangible concepts of ‗corporate social responsibility‘ and ‗sustainability‘. Triple Bottom Line or TBL focuses

29 on data collection, analysis and decision making using economic, environmental and social performance information. In this concept, the company is judged on the basis of its triple bottom-line: its returns to shareholders, communities and the environment. Under this concept, the company will have to look at not just what it should do with its profits, but how it made its profits in the first place. This implies looking at impacts on all its stakeholders.

This view, which is gaining ground, implies that CSR has to be seen as an essential part of business — not something divorced from business. Companies like Tata group and ITC are at the forefront of adopting the triple bottom-line approach in India.

30

Women Empowerment

Introduction:

The term ―empowerment‖ has become one of the most widely used development terms. Women‘s groups, non-governmental development organizations, activists, politicians, governments and international agencies refer to empowerment as one of their goals. Yet it is one of the least understood in terms of how it is to be measured or observed. It is used precisely because this word has now been one of the fashionable concepts to include in policies/programmes/projects that there is a need to clarify and come up with tentative definitions.

Women constitute more than 50% of the population, undertake most of the work (two thirds) but only receive one tenth of the total income rather than men. The working hours of women are longer than that of men, often 12-16 hours per day. In addition to their domestic responsibilities in child care, women have to be responsible for housework, such as fetching firewood, water and cooking and even hard work as ploughing and raking, planting, transplanting and harvesting. Women have to suffer from continuing under nutrition and two thirds of them are anaemic. Rural women lack sex education and have poor health due to frequent pregnancies. The illiterate women especially lack of information on balanced diet, family planning, house cleaning and other information to improve their health and the quality of life. They have lower status and low paid occupations, lower economic positions so they are less conscious and lack self-confidence. They have a few books and a little time to read so they can not appreciate the benefits of reading and have no motivation for reading.

The Concept of Empowerment:

Empowerment has become a widely used word. In spheres as different as management and labour unions, health care and ecology, banking and education, empowerment also taking such place. It is also a concept that does not merely concern personal identity but brings out a broader analysis of human rights and social justice.

The term empowerment has been emerged as a ‗development buzzword‘. But empowerment is easy to ‗intuit‘ but complex to define. An empowered individual would be one who experiences a sense

31 of self-confidence and self-worth; a person who critically analyzes his/her social and political environment; a person who is able to exercise control over decisions that affect his/her life‖. The nature of empowerment renders it difficult to define. On the one hand, it is often referred to as a goal for many development programmes/projects. On the other hand, it can also be conceived as a process that people undergo, which eventually leads to changes. Nelly Stromquist, for instance, defines empowerment as ―a process to change the distribution of power both in interpersonal relations and in institutions throughout society‖ while Lucy Lazo describes it as ―a process of acquiring, providing, bestowing the resources and the means or enabling the access to a control over such means and resources.‖

Women Empowerment:

According to Namtip Aksornkool ―It is a process in which women gain control over their own lives by knowing and claiming their rights at all levels of society at the international, local, and household levels. Self-empowerment means that women gain autonomy, are able to set their own agenda and are fully involved in the economic, political and social decision-making process.‖

According to Ms.Lazo, empowerment is a moving state; it is continuum that varies in degree of power. It is relative. One can move from an extreme state of absolute lack of power to the other extreme of having absolute power.‖ Empowerment can have six components: Cognitive, Psychological, Economic, Political, Social and Legal.

According to Ms.Stromquist, the Cognitive Component would include the ‗women are understanding of their conditions of subordination and the causes of such conditions at both micro and macro levels of society. It involves acquiring new knowledge to create a different understanding of gender relations as well as destroying old beliefs that structure powerful gender ideologies‖.

The Psychological Component, on the other hand, would include the ―development of feelings that women can act upon to improve their condition. This means formation of the belief that they can succeed in change efforts.‖

According to him the Economic Component ―requires that women can be able to engage in a productive activity that will allow them some degree of autonomy, no matter how small and hard to obtain at the beginning‖. Education is considered one of the most important means to empower

32 women with the knowledge, skills and self-confidence necessary to participate fully in development processes.

The Political Component would encompass the ―ability to organize and mobilize for change. Consequently, an empowerment process must involve not only individual awareness but collective awareness and collective action. The notion of collective action is fundamental to the aim of attaining social transformation‖ (Stromquist). In past women role in politics is mere but know the scenario is different a good percentage i.e nearly above 33% are participating. Encouraging them to participate in community programmes, Integration of women in the general national development plan, Allotting them good portfolio‘s like education, health, sanitary that motivates them to do good practices, All family members, society, environment etc., should be support full, If all the trees were one tree, what a great tree it would be; It is clear that women can be empowered individually, the feminist vision is one where women are able to articulate a collective voice and demonstrate collective strength. It was also stressed that incorporating the feminist perspective in the concept of empowerment implies a long-term re-designing of societies that will be based on democratic relationships. Ms.Dighe talks about empowerment as dealing with strategic rather than practical gender needs.

Social Empowerment; It is a ―process to change the distribution of power in interpersonal relations among different people, cultures, activities of the society.‖ In past awareness regarding the society is unknown to the women but present scenario reveals completely different pictures and knows they are equally participating in all activities of the society. Best references are our present President is Mrs. Pratibha Patil. U.S. foreign secretary a women, Hillary Clinton. All efforts must be mobilized to enabling at least the next generation to be genuinely literate to empower socially. Encouraging traditional women organizations.

Talking about Legal Empowerment; Protection is needed for the women in terms of health, harassments, superstitions, cultural barriers etc., Child marriages, satisahgamana are some of the oldest traditions, which are the basic barriers for the girls development. But now there are no such rubbish traditions to be in practice. Best reference is latest women gruhahimsa crime results in lessening the harassments on women. Make them aware of the civil rights, Exercising the legal rights whenever necessary, Preparing and canvassing the documents regarding the legal freedom for women, Providing good literary programmes regarding the legal empowerment.

33

Indicators of Empowerment:

Understanding that empowerment is a complex issue with varying interpretations in different societal, national and cultural contexts, there is some listing of indicators.

At the level of woman and her household:

 Participation in crucial decision-making processes;

 Extent of sharing of domestic work by men;

 Extent to which a woman takes control of her reproductive functions and decides on family size;

 Extent to which a woman is able to decide where the income she has earned will be channelled to;

 feeling and expression of pride and value in her work;

 Self-confidence and self-esteem; and

 Ability to prevent violence.

At the community/organizational level:

 Existence of women‘s organizations;

 Allocation of funds to women and women‘s projects;

 Increased number of women leaders at village, district, state and national levels;

 Involvement of women in the design, development and application of technology;

 Participation in community programmes, productive enterprises, politics and arts;

 Involvement of women in non-traditional tasks;

 Increased training programmes for women; and

 Exercising her legal rights when necessary;

At the national level:

 Awareness of her social and political rights;

 Integration of women in the general national development plan;

 Existence of women‘s networks and publications;

 Extent to which women are officially visible and recognized; and

34

Facilitating and Constraining Factors of Empowerment:

Empowerment does not take place in a vacuum. In the same way that Ms.Lazo talks about women‘s state of powerlessness as a result of ―a combination and interaction of environmental factors, ―one can also discuss the condition/factors that can hasten or hinder empowerment.

Facilitating factors:

 Existence of women‘s organizations;

 Availability of support systems for women;

 Availability of women-specific data and other relevant information;

 Availability of funds

 Feminist leadership;

 Networking;

 Favourable media coverage;

 Favourable policy climate.

Constraining factors:

 Heavy work load of women;

 Isolation of women from each other;

 Illiteracy;

 Traditional views that limit women‘s participation;

 No funds;

 Internal strife/militarization/wars;

 Disagreements/conflicts among women‘s groups;

 Structural adjustment policies;

 Discriminatory policy environment;

35 .

Chapter 2:

36

Godfrey Phillips India Ltd.

Introduction:

Godfrey Phillips India Limited, one of India‘s leading corporate houses, is the flagship Company of the K K Modi group. Diversified in Tea, Confectionary, Tobacco, Industrial Chemicals, Polyester, Multilevel Marketing, Retail and Cosmetics, The Modi Group is one of India‘s most reputed conglomerates. As the second largest player in the Indian cigarette industry, Godfrey Phillips India Ltd‘s annual turnover exceeds INR 2200 crore (approx. US $458.05 million) The company has over 1500 employees, 2 manufacturing locations in Mumbai and Ghaziabad, it‘s Leaf Division at Andhra Pradesh and 5 Branch offices at Delhi, Mumbai, Hyderabad, Ahmedabad and Chandigarh.

It owns some of the most popular cigarette brands in the country like Four Square, Red and White, Jaisalmer, Cavanders and Tipper. Over the years it has also set its own benchmarks in innovation with revolutionary brands like Stellar, the first slim cigarette and I-gen, the first euro norm cigarette in India.

Its products are distributed over an extensive India wide network of more than 500 distributors and 800,000 retail outlets. With the Corporate Office in Delhi, the Company has offices all across India in over 8 locations.

Godfrey Phillips India has two major stakeholders, one of India's leading industrial houses - the K. K. Modi Group and one of the world's largest tobacco companies, Philip Morris. The Company also enjoys a strong backing of over 12,000 shareholders.

Vision:

―To become a leading tobacco player in India and beyond.‖

Godfrey Phillips India empowers all its people to think and act radically, stretch relentlessly and generate path breaking ideas and strategies to propel the Company. This helps to create and build powerful brands with unmatched service and world class processes.

37 Godfrey Phillips India will rapidly grow shareholder value and achieve a commanding presence nationally while gaining a significant presence in global markets. Godfrey Phillips India will be amongst the most respected companies in India and in the tobacco industry worldwide.

Values

1. Passion for winning:

 Constantly thrive in bettering the competition in every field.

 Have a positive attitude, and restlessly seek and capture new opportunities. 2. Innovation through learning and entrepreneurship:

 Be a world class innovative organization by continually developing and successfully launching new brands.

 Encourage risk taking and learning, and create conditions for empowerment with accountability.

3. Winning trust internally and externally:

 Build enduring relationships with all stakeholders including employees, shareholders and trade/alliance partners, and honour all commitments.

 Encourage transparent and fair systems and policies. 4. Global mindset:

 Constantly benchmark in all areas against the best globally, and strive to exceed those benchmarks.

 Develop opportunities through a global network of distributors and alliances. 5. Socially responsible corporate citizen:

 Ensure the compliance of all applicable laws and the highest standards of corporate governance.

 Support and encourage employees to actively participate in identified social and environmental concerns.

Directors and Management:

Godfrey Phillips India is a Company committed to innovation and continuous improvement which can be seen in the Company employees; from the top management to the factory level.