Reliance Industries Limited and CSR activities Essay Example for Free

Reliance Industries Limited and CSR activities Essay EXECUTIVE SUMMARY: Flagrantly, nowadays CSR approach has been immensely exploited by the organizations and non-governmental organizations in a negative manner since the global markets are becoming competitive. The term corporate social responsibility has become a trend of symbols to explicit the company’s corporation as being socially responsible, however intrinsic intention has been self-regulation and private interest of the company. Hence, the reliance industry limited has taken the corporate social responsibility as their mainstream of profit maximization in terms of being socially responsible to educational, environmental, health care, and agricultural perspectives. Introduction The aim of this report is to apply sufficient knowledge’s for the importance of (CSR) and its contribution to strategic corporations, critically review the (CSR) functions of businesses as well as delivering efficient  information regarding the (CSR) activities of Reliance Industries Ltd. To demonstrate the above objectives it is essential to explain what is meant by CSR? What are the objectives of CSR? And furthermore brief description of Reliance Industries Ltd profile. In recent years, there has been greater attention to the concept of Corporate Social Responsibility. The term is described as the businesses responsibility towards their stakeholders’ legal, ethical, social and environmental expectations. Different scholars have defined (CSR) in various ways. First effort for defining (CSR) was made by Bowie (1953) who was observed as the father of academic debate for Corporate Social Responsibility (Carroll 1979, p.479). Bowie stated, that it is the businesses oblig ation to manage business process for the betterment of a society and enhancement of its value. Moreover, World Business Council for Sustainable Development (WBCSD) illustrated CSR as the commitment of business while behaving ethically and cooperating to the economic development by strengthening the quality life of workforce, families and local communities. Furthermore, Davis and Blomstorm elaborate the term CSR as an activity in order to improve the quality life of a society as well as developing the status of the organization by expanding its interest. However, Carroll defined (CSR) â€Å"Social responsibility of business encompasses the economic, legal, ethical and discretionary expectations that society has of organizations at a given point in time† (Carroll, 1979, p.500). Relatively, Carroll illustrated the pyramid of CSR by differentiating the four concept of social responsibility: economic, legal, ethical and philanthropic obligations. To sum up CSR can be defined, managing the business processes with being responsiveness to the economic, legal, ethical and environmental expectations of stakeholders so that to produce a positive impact to the society. Consequently, as far as the report do concerns to the CSR activities of Reliance Industries Ltd, it is important to take a look after the mentioned company’s profile. The largest private sector of India, The Reliance Group founded by Dhirubhai H. Ambani (1932-2002) with operating in energy and material businesses value chain. The flagship company, Reliance Industries Ltd, owes an excess of Group annual revenues of US $ 66 billion and is apart of Fortune Global 500 Company. Starting with textiles in late seventies, Reliance expanded their business by pursuing the backward vertical integration strategy while  producing fiber intermediates, plastics, polyester, petrochemical as well as petroleum refining and oil and gas exploration and production. Reliance company proud itself for being the largest polyester yarn and fiber producer among the top five producers in the world. IMPORTANCE OF CORPORATE SOCIAL RESPONSIBLITIES: Conduction of Corporate Social Responsibility strategy has became vital trend for the companies in a current highly competitive global market. Inherently, the CSR strategy has remained the pillar of the sustainability of a business as far as the consumers and markets taste and preference changes are concerned. Moreover, the CSR-Asia has described CSR as the business operations incorporation in environmental and social perspectives with the interaction of their stakeholders. Hence, CSR approach owe following features: Firstly, it observes for the increasing of the shareholders profit in order to preserve the long-term viability of the business. Secondly, environmental and social improvisation has been the core objective of the CSR approach. Thirdly, the CSR concept is not a crowding out effect for the business, but it is about the way that business is operated. In this sequence, CSR concept is concerned with the long-term sustainability of the business while maximizing the shareholders interest and plays an active role in the development of community (http://www.scribd.com/doc/3934672/Importance-of-CSR-to-Business). CRITICAL REVIEW OF (CORPORATE SOCIAL RESPONSIBILITY: Inherently, above discourse explicit that mainstream of CSR does concerns with social, legal, and economical expectations of stakeholders. Therefore, CSR is flagrantly accountable for capitalist apparatus that business solely considers their own private benefits of raising their shareholders profit. For instance, on the one hand, Coca Cola company do informs African nations of HIV in order to vest a vast reputation to its company, qua profit is considered as core objective of business. On the other hand, it is a shame that they do not implement a program for telling the world regarding tooth decay as such program would affect their brand name reputation. Subsequently, in a survey of 1100 chief executives, 62% of those chief executives have underpinned the CSR concept as vital for profitability. Relatively, CSR has a risk of compelling chief executives to be sociopolitical players. As the government shrinks and loses its power, the business chief executives remains with huge power in which the businesses might acquit the power for their self-regulation profitability of the business. Companies, such as, Glencore company, whose enjoying an immense portion of political power in some Africa’s nation, is conducting the child labor extra-legal function for the purpose of cost reduction. Relatively, CSR has been criticized by excluding the local communities from policy-making decisions while working on Corporate Social Responsibility strategy. Moreover, many contradictions exists in CSR approach, such as lack of financial incentives, lack of legal literacy, etc. those disincentives the poorer group to use laws for their protection of their civil rights. CSR is also criticized in some arenas as the source of gaining access to the market while using it as a factor of price. Furthermore, some industries conducts the CSR program for not considering the government’s strong laws and regulations, as far as their CSR project implementation are concerned with profit maximization. Therefore, mentioned CSR project implementation may lead the NGO’S for protesting and boycotting in which firms may endure a huge expenditure on such projects. However, CSR approach compels companies who cannot cover their costs, to impose high prices to the society while catering their products with high prices. In a sequence, critiques have been arisen against CSR policy of companies for its none existence of accountability and corporate accountability, where lack of transparency, a sophisticated analysis of the political economic dimensions of corporate power and immense inequities of power exists (Ray Broomhill, corporate social responsibility: key issues and debates, 2007). To sum up, according to Rhys Jenkins (2005) the UK political economist, many CSR projects of high profiled companies has ample the scope of tax avoidance, transfer pricing and the misusing of market power which contradicts to the legitimacy of CSR. Relatively, some reforms of corporate policies has been exploited by the act of CSR in which consequently brought vast disparities to the society such as destructing the labor conditions associated with outsourcing and labor market liberalization, increases in the level of pollution, and the promotion of macro economic policies through the acquitting of corporate lobbying which has a negative impact on society and  environment (Ray Broomhill, corporate social responsibility: key issues and debates, 2007). RELIANCE INDUTRIES LIMITED CSR ACTIVITIES: Reliance industries have performed major social responsibilities towards the betterment of the community. The company has valuable contribution in terms of health, education, environment, corporation in natural disasters, and infrastructure development. Following are vast disclosure regarding CSR activities of Reliance Industries Limited: 1. Education: Reliance Industries has constructed nine schools with improving the 13,251 students education level across the India. Furthermore, the company conducts â€Å"the Kanya Kelvani† program, which plays a vital role to the contribution of supporting Indian Governments projects towards education of girls across all over the India. Relatively, RIL’s are implementing (Jagurti Project) for those students who are suffering mentally from social and economical backwards and support them to obstacle with dyslexia. Under the Jagurti Project, 35 trainees are spending 8800 hours in order to arise the tolerance of underprivileged children to tackle with dyslexia. Consequently, the company owes partnership with UNESCO and BBC for the awareness of dyslexia to the other villages’ students. (http://www.ril.com/html/aboutus/social_resp_comm_dev.html). 2. Community Health Care: Reliance Industries has brought pivotal improvisation to the Community Medical Centers for providing ample health care services to the neighboring villages. For instance, the Reliance Company is acquitting Drishti project, which is cooperated with the Association of Blind and made contribution to 9000 free corneal grafted surgeries for those blinded folks who are suffering from being underprivileged. Moreover, one of the manufacturing divisions of Reliance Company (Hazira Manufacturing divisions) has commenced an Anti-Retroviral Treatment Center in the country and specifically for the cleaners and drivers of all product transport vehicles. The program mainstream is for HIV / AIDS awareness. (http://www.ril.com/html/aboutus/social_resp_comm_dev.html). 3. Environment Initiatives for the Community: The Reliance Industry initiated a zero garbage campaign to develop the disposal of solid wastage concept in its surroundings and residential area. The aim of the campaign is to provide a cleanliness drive in order to sustain a disease-free environment for its employee’s residual sites. The industry is acquitting a social and economical security program for woman rag pickers with assistance of an NGO. The core objective of the project is to reduce the plastic litter for preserving its commitments of being responsible care. Relatively, the company has stretched a 900-meter road through the usage of 5% plastic waste in order to deduct the construction cost and as well as to improve the roads construction quality and life. (http://www.ril.com/html/aboutus/social_resp_comm_dev.html). 4. RELIANCE RURAL DEVELOPMENT TRUST: Reliance Rural Development Trust (RRDT) has initiated a rural infrastructure development program by undertaking 797 projects in 760 villages of 24 different zone of GUJARAT states. The project is consisted of 58 Concrete Cement Roads, 61 underground, and 06 Check Dams. Subsequently, all the check dams are constructed with accordance to the 8.7 mcft water storage capacity and 1065 Hectors of the land would have access to the Check Dams water. (http://www.ril.com/html/aboutus/social_resp_comm_dev.html). 5. Livelihood Support Program: Reliance Industry has undertaken the self-help group (SHG) program for women and youth generation of the surrounding villages in order to enhance their quality life while being â€Å"self sustaining† to support to their families. The program has facilitated the women by providing various courses such as dress making and designing, beauty culture, health care, nursing and hospital attendant. However, the program implement pumping and hand pump repairing, mobile repairing, computer hardware repairing, vehicle motor driving, and etc. courses. (http://www.ril.com/html/aboutus/social_resp_comm_dev.html). 6. Improving Quality of Agriculture Produce: Reliance Industry Limited has also participated in assistance of farming in terms of advanced technologies, storage, handling and distribution of products. For instance, the company vested Leno bags, which are made out of polypropylene and such bags are effective for reducing the handling losses of fruits and vegetables. Explicitly the company enforced the formers for the usage of advanced techniques (plastic) as it increases the productivity, contributes to the reduction of losses and in enhancement of earnings and distributed promotional materials (http://www.ril.com/html/aboutus/social_resp_comm_dev.html). RELIANCE INDUSTRIES CSR CONTRIBUTION TO ITS STRATEGIC MANAGEMENT): In a current competitive global environment, corporations does exist vastly where social responsibilities are concerned (Halme, Roome, Dobers, 2009). Therefore, to make more flagrant the contribution of corporate social responsibility with corporate strategy, it is essential to explicit what is corporate or strategic management? And what is mean by social responsibility? Essentially, strategic managements core objective is to accomplish goals through standard decision-making that concerns with determining objectives, policies and plans (Andrew, 1987). According to Andrews (1987), strategies main observations are regarding the implementation of companies and businesses goals, their economic and non-economic corporations and nature, and the relationship between the stakeholders, he furthermore stated that corporate strategies are a complex concept as the top managements decisions reflects an impact to the stakeholders who are independent with the company. However, undoubtedly the strategic management decisions covers both the social as well as economic aspects. According to Porter and Kramer (2006), there is a strong correlation between corporation and society. This is due to the fact of direct influence of company’s activities to the communities of their work and the strategic management department executives should have strictly consider the society’s needs and decisions with accordance to their  expectations. Hence, Reliance Company has processed various CSR activities in order to make ease to their decision-making trends towards policies and plans in order to accomplish the organization’s goal. For instance, the Reliance Limited Industries is conducting educational programs, health care services, agricultural development services to give a boost to their status of their company as wells as implement environmental initiatives community program while procuring a clean environment to their working community for the purpose of being safe to provision an ease way for acquitting policies and plans. As a result, the strategic management executives undertake the corporate social responsibilities as an intrinsic factor for the purpose of catering sustainable profits to the stakeholders (BAR, Curitiba, v. 7, n. 3, art. 5, pp. 294-309, July/Sept. 2010). Conclusion: To sum up, virtually the corporate social responsibility concept considers the ethical, social, and environmental aspects of the stakeholders. Relatively, the organizations exploit the corporate social responsibility as maximizing their shareholders profit through satisfying the stakeholders mentioned expectations. Many organizations make the CSR approach as their mainstream trend and apparatus for gaining reputation and catering a better working environment for their employers in order to enhance the quality status of their organization as well as acquitting the organizations prime goal. For instance, Reliance Industries Limited process the environment initiatives, education programs, health care programs, rural development program, etc. at their own working community for enhancing the quality life of the company’s employees and maximizing the shareholders profit. Although, CSR approach owes indispensible positive impacts to the society, the concept has extralegal and negative disparity to the community. As far as the core objective of the organization concerns with maximizing their profits, organizations misuse the CSR approach for their own private interest in terms of power (in case government shrinks the company remains with mass power), cost (in order to recover the CSR projects cost the company rises the their products cost for the consumers), accountability, and etc. Lastly, CSR concept can be observed as the utility apparatus for the stakeholders, owing negative impacts with it. RECOMMENDATION: Since many companies are interlinked with extralegal activities while implementing the CSR activities due to owing immense power after the government in some Asian and African countries and goes to disparity of their trends and code of ethics such as exploiting the child labor method, they are recommended to follow the code of ethics they have established as it might affect to the quality and status of the organization through the media revealer. Furthermore, companies are required to motivate their CSR projects employees via catering training facilities, bonuses, developed salary system in order to enhance their productivity, thus, to reduce their total cost of the CSR project as higher cost for CSR project remains the company with higher prices of the products to the customers. Therefore customer tends to change their preferences to other market. REFERENCES: Benn, Suzanne and Bolton, Dianne (Key concepts in corporate social responsibility, 2011). Broomhill, Ray (Corporate Social Responsibility: Key Issues and Debates, 2007) El Ghoul, Sadok, Guedhami, Omerane, C.Y. Kwok, Chuck, R.Mishra, Dev ( Banking of Journal and Finance, 9th September 2011, p.g. 2388-2406). Volume 35. Lober, Heike (corporate management, corporate social responsibility and customers, 2012). Ril.com (N.D.) Social Responsibility and Community Development (Online). Available from: http://www.ril.com/html/aboutus/social_resp_comm_dev.html (access on 29th May 2012). Ril.com (N.D.) Reliance Group (Online). Available from: http://www.ril.com/html/aboutus/aboutus.html (access on 29th May 2012). Scribd.com (N.D.) Importance of CSR to Business (Online). Available from: http://www.scribd.com/doc/3934672/Importance-of-CSR-to-Business (access on 26th May 2012).