4th Wheel April 2011 Newsletter

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  • 8/7/2019 4th Wheel April 2011 Newsletter


    April 2011

    A portal to ignite energy and enthusiasm towards CSR

    INTRODUCTION TO THE NEWSLETTERThe fact that Corporate Social Responsibility (CSR) has gained tremendous importance cannot be debated.

    Owing to globalization and increasing economic power and

    influence in society, the business sector has been assigned or gained

    a new role in society. There has been an increase in the expectation

    from businesses in the role they would play in the betterment of


    The United Nations Global Compact, a policy initiative for

    corporate entities committed to aligning their businesses with

    universally accepted principles in areas such as human rights, labour,

    the environment and anti-corruption, and the voluntary guidelines on

    Corporate Governance and CSR released by Indias ministry of

    corporate affairs in 2009 are two examples of the heightened

    importance of CSR nowadays.

    There has been a drastic change in the way CSR is perceived. It

    is no longer about charity. There has been a shift to profitable and

    sustainable business models to combat underdevelopment.

    One way has been the use of organizational skills to create a

    social impact. For example FedEx Corp., the worlds largest logistics

    services company, provides contributions as well as logistics and

    transportation support for emergency and disaster relief. Microsoft

    Corp. launched Unlimited Potential (UP), a global initiative focused on

    imparting technological skills to disadvantaged individuals through

    community-based technology and learning centres.

    The other wave has been of socio-commercial investments, suchas technology multinational Apple Inc. donating computers to schools,

    thereby increasing the usage and appeal of their systems.

    Another popular method has been to integrate CSR with a

    companys business model, such as in the case of Starbucks Corp.

    working with Conservation International, a not-for-profit that seeks to

    protect ecosystems and biodiversity in order to ensure human health,

    to support farmers in minimizing their impact on the local


    This reflects an increasing understanding among businesses that

    they can play a positive role in societies where they operate and invest

    and contribute to social and economic development.

    Looking at current trends and the heightened sense of

    responsibility of business houses, it is essential to get the ball rolling

    and ignite enthusiasm and dialogue on CSR. This newsletter aims to

    increase awareness of CSR among corporate entities and the masses

    and invite views on pressing social ills and problems.

    United Nations Global Compact

    Never before in history has there been a

    greater alignment between the objectives of

    the international community and those of the

    business world! Common goals, such as

    building markets, combating corruption,

    safeguarding the environment and ensuring

    social inclusion, have resulted inunprecedented partnerships and openness

    between business, governments, civil society,

    labour and the United Nations.


    In this issue

    Pg 2 -ExplainingCSRPg 3 - Our Influences

    Pg 4 - Currentendeavors

    Pg 5 - An introduction to

    CSR in India

    Pg 6 - 4th Wheel


  • 8/7/2019 4th Wheel April 2011 Newsletter


    CSR is the continuing commitment by business to contribute to

    economic development while improving the quality of life of the

    workforce and their families as well as of the community and society

    at large.(World Business Council for Sustainable Development)In its broadest sense, CSR refers to the firms consideration of,

    and response to, issues beyond the narrow economic, technical, and

    legal requirements of the firm to accomplish social benefits along

    with the traditional economic gains which the firm seeks (Davis,1973).

    CSR basically focuses on what an organisation does that affects

    the society in which it exists (Stone, Social issues in business, 1987)

    CSR is a commitment to improve community well being through

    discretionary business practices and contributions of corporate

    resources. (Philip Kotler and Nancy Lee, Corporate Social

    Responsibility, 2010)


    NOTECorporations have gained

    immense clout in theprevailing form of

    capitalism. The role of

    businesses in facilitating

    development has long been

    debated. We have

    progressed to a society,

    where businesses are no

    longer based on the sole

    motive of profit

    maximisation. There has

    been an acceptance of the

    role they can play in

    making the effects of

    globalisation and business

    operations, positive and

    reducing the ill effects

    by conscious efforts.

    These efforts in a broad

    sense are termed as

    Corporate Social

    Responsibility. CSR is an

    evolving concept and is no

    longer random charity or

    philanthropy but is now

    looked as key to business

    operations, sustainability

    and development.Thisendeavorby thecorporate sector should be

    accompanied by appropriate

    State assistance, guidance

    and regulation. Civil

    Society and International

    Organisations can also

    encourage and make CSR

    more effective.

    This introductory issue

    introduces the concept to

    the reader and attempts to

    generate dialogue and

    discussion on the subject.

    The 4thWheel, a start upthink tank, in operation

    since September 2010 uses

    this medium to communicate

    their beliefs, interests

    and on going projects,

    hoping the literature

    transpires into ideas,

    innovations and support

    for CSR.

    ..WHAT IS CSR?

  • 8/7/2019 4th Wheel April 2011 Newsletter


    INFLUENCES According to Bill gates, self interest is just one of twoforces in human nature. The other is caring for others.The book asserts that the genius of capitalism is that it makes self

    interest serve the general interest. Philanthropy and government are

    supposed to address our caring for others but there is not enough

    philanthropic or government money to solve the worlds problems. It is a

    dialogue and presents notable articles by professionals who discuss a

    reversed system which should use profit incentives where possible. But

    even where profits are not possible, there is a market based incentive:

    Recognition. Positive recognition is good for a companys reputation,

    good for attracting customers and good for attracting employees.

    Creative capitalism is a system where incentives for both profits and

    recognitions motivate both self interest and caring for others. Under

    creative capitalism, governments, businesses and non profits work

    together. Bill Gates gives suggestions of corporations donating money

    or products and corporations spending money or using technology to

    find new markets in poor countries. An apt example is Tiered pricing

    wherein a drug company has a valuable patent and charges full

    monopoly price in the developed world but lets poor world

    manufacturers produce for less than one dollar a dose. Another example

    he gives is the Bono (RED campaign) model under which products are

    sold with a small percentage of the profits going to worthy causes in the

    poor world.

    C.K. Prahlad (2005) has stated that The idea that the

    private sector can and should be involved in creating

    market-based solutions for the worlds poorestconsumers is gaining credibility.

    He highlights various case studies, a noteworthy one being,

    Jaipur rugs, operating in India and elaborates on how a company can

    benefit the poor by connecting them with global markets. Jaipur rugs

    makes this connection by building and orchestrating a global supply

    chain on a massive scale- one focussed on developing human

    capability and skills at the grassroots level, providing steady incomes

    for rural men and women in the most depressed parts of India and

    connecting them with market of the rich, such as the US. He gives an

    example of the cell phone revolution which has demonstrated beyond

    doubt that there is a market for world class goods and services if they

    can be made at accessible at affordable prices. The cell phone, we can

    say, has shown that the Bottom of the pyramid is not just a market but a

    source of innovation in business models and applications. It has

    transformed the lives of the poor. We can do well and do good

    simultaneously. He mentions organisations which help the handicapped

    walk, helps subsistence farmers check commodity prices and connect

    with the rest of the world. There are banks adapting to the financial

    needs of the poor, power companies reaching out to meet energy

    needs, and construction companies doing what they can to house the

    poor in affordable ways that allow for pride. He also mentions the

    chains of stores tailored to understand the needs of the poor and to

    make products available to them.

  • 8/7/2019 4th Wheel April 2011 Newsletter


    CSR in rural areas of Gujarat

    Business thrives on a prosperous society. India has 638,596 villages. The rural population is

    72.2% (Census of India, 2001). These basic facts make it an important task to cater to

    contemporary Indias rural population and their quandary.