CHAPTER 1: INTRODUCTION

1.1 Introduction:
Social responsibility is a concept well known in the corporate world and beyond that. All over the world have practiced only profit making actions at past but not for long as the enterprise started to develop complexities and wideness in size and actions so was their reach getting bigger and bigger. As every person has his own social responsibilities towards the society so does the business firms. The idea is that, the business has social obligations and above and beyond making a profit that is corporate social responsibility. However, it is regretful that though internationally it is being practiced widely, Bangladesh is still lagging behind. The difference between the world standard and the practice in Bangladesh shows the lacking here and the scope for development. This report has been prepared as a requirement of the Project work. The report was based upon the CSR practices of different banks in Bangladesh. CSR is a means of discussing the extent of any obligations a business has to its immediate society; a way of proposing policy ideas on how those obligations can be met; as well as a tool by which the benefits to a business for meeting those obligations can be identified.

1.2 Objectives of the Study: The objectives regarding this paper are –To fulfill the requirement of the course curriculum.
  • To throw light on the concept of CSR.
  • To find out CSR practice of banking sector in Bangladesh.                                                                              
  • To recommend some necessary steps to boost CSR activities and their reporting.
1.3 Scope of the Study: The scope of this study was based on the information available from the direct interview of employees engaged in banks. The analysis and interpretation prepared in this report was conducted on the executive of banks. The analysis included all the statistical analysis and their interpretations. Vertical and horizontal analysis was also included to show the overall condition of CSR and its relation with different variables. Some suggestions and recommendations were also made in this report as this was the part of our study. To analyze and evaluate this paper we have concentrate on different CSR activities of bank through the employees of different banks

1.4 Limitations: There are some limitations that I have faced in preparing this report.  Basically I faced difficulties in collecting data from the different sources.  To collect primary data some individual showed no interest in interviewing them.  For secondary data, I faced problem of unorganized record of documents keeping by different sources.Preparing the report I faced some difficulties which are
  • Lack of proper information in the websites of the Banks. 
  • Lack of necessary information in the official publications of Bank companies.
  • Inexperience and time constraint are the other limitations.
  • Secondary data were collected from the Annual Reports which may contain biased information.
  • This project has been prepared with limited resources. Due to this reasons the justifications stated may not reflect the actual scenario.

CHAPTER 2: LITERATURE REVIEW

2.1 Corporate Social Responsibility
Definitely social responsibility includes the responsibility of social people, groups, societies, and business organization. Here raises the question: why is there more interest in, and debate about the social responsibility of business than about the social responsibility of the other institutions? It is of course legitimate to raise the issue of social responsibility of business. But we hear rather less about the social responsibility of, say, the churches, the media, trade unions, the professions, universities, or even the government. When people collectively organize themselves in organizations of one kind or another, do those impersonal legal entities really acquire social responsibilities, which differ from those of other collective entities? Many people are uneasy about the profit motive, suspecting that profits emerge only from exploitation. They fear that free enterprise encourages greed and selfishness. They are reluctant to accept the logic of Adam Smith’s famous theory of invisible hand, which holds that business people the general interest more effectively by pursuing their own interests than by directly trying to ‘do good’. I suggest that, this is why we are here little about the social responsibilities of churches, charities and so on. Business, in contrast, is assumed to have a problem about its social responsibilities because it is driven by profit-motives. So it can be said that, Corporate Social Responsibility (CSR) means that companies integrate social and environmental concerns in their business operations and in their interaction with business relevant groups on a voluntary basis. In general, CSR is characterized by the following aspects:

•    Voluntary initiatives going beyond legislative requirements and contractual obligations
•    Activities to benefit the employees, business relevant groups (including the society as such) or the environment
•    With a positive contribution to the individual target group while minimizing negative effects on other (including environment)
•    Regular activities rather than one-time-events (i.e. related to business strategy vs. ad hoc) CSR is not only about fulfilling a duty to society; it should also bring competitive advantage. Through an effective CSR program, companies can:
•    Improve access to capital
•    Sharpen decision-making and reduce risk
•    Enhance brand image
•    Uncover previously hidden commercial opportunities, including new markets
•    Reduce costs
•    Attract, retain and motivate employees

2.2 The origin of CSR

The history of CSR is almost as long as that of companies. Concerns about the excesses of the East India Company were commonly expressed in the seventeenth century. There has been a tradition of benevolent capitalism in the UK for over 150 years. Quakers, such as Barclays and Cadbury, as well as socialists, such as Engel’s and Morris, experimented with socially responsible and values-based forms of business. And Victorian philanthropy could be said to be responsible for considerable portions of the urban landscape of older town centers today.

In terms of activism aimed at companies perceived as acting against the general interest: The first large-scale consumer boycott? England, in the 1790s over slave harvested sugar. (It succeeded in forcing the importer to switch to free-labor sources.)In 1612, English jurist Edward Coke complained that corporations “cannot commit treason, nor be outlawed or excommunicated, for they have no souls.”

Corporate Social Responsibility (CSR) is a worldwide-accepted development on how companies can manage their business processes to produce an overall positive impact on society and environment. CSR represents care for social and environmental issues with a profitable business perspective: the so-called ‘People – Planet – Profit’ philosophy (see next figure).

2.3 Views of Social Responsibility

There are two views of social responsibility. Those are
•    The Classical View
•    The Socio economic view

2.3.1 The Classical View

The view that management’s only responsibility is to maximize profits.

2.3.2 The Socioeconomic View

This is the modern views of today’s global business and economy. In this view management’s social responsibility goes beyond making profit to include protecting and improving society’s welfare.

2.4 Dynamics of Corporate Social Responsibility in Bangladesh

‘Corporate Social Responsibility’ or CSR for short is a relatively new term that has suddenly gained currency. Hundreds, indeed thousands, of companies are adopting ‘ethical policies’ or ‘codes of conduct’ saying how they intend to behave. More and more companies are signing up to such initiatives as the United Nations Global Compact or the Fair Labor Association. They are joining bodies such as World Business Council for Sustainable Development and CSR Europe. On both sides of the Atlantic there are myriads of conferences and ‘initiatives’, where corporate ‘CSR Executives’, some even from companies with a long anti-union record, meet up with campaigns, NGOs and indeed trade unions. Take the example of McDonald’s. In the 1990s, the hamburger corporation took two campaigners through a long and exhausting libel court case in London after they criticized its corporate practices. Then there was the 2004 film ‘Super Size Me’. Its public image thoroughly dented, today McDonald’s leaflets in the UK show happy local farmers producing organic crops for healthy meals. Or the oil company Unocal, which was severely criticized for knowingly using forced labor to construct a pipeline in Burma, a country run by a vicious regime and subject to an international boycott. Labor rights’ groups in the US took Unocal through the courts. Unocal now has a huge area on its website devoted to CSR. In fact, CSR means different things to different people. However, certain ideas are becoming commonly accepted. One is that CSR is not about philanthropy or charitable work. It refers to something much more fundamental. It is about how companies take responsibility for their actions in the world at large. Conventional CSR Watchdogs include Labor Unions, Consumer Groups, Environmentalists, NGOs and all ‘Stakeholders’ watching over their interest as opposed to ‘Stockholders’ only.

The role of business worldwide and specifically in the developed economies has evolved over the last few decades from classical ‘profit maximizing’ approach to a social responsibly approach, where businesses are not only responsible to its stockholders but also to all of its stakeholders in a broader inclusive sense. One can identify so many reasons for shifting the role of business from classical concept to a responsible business concept, but negative impression of stakeholders on the enterprise would get a higher priority among others. In one hand, enterprises create wealth and job opportunities for the society and on the other; they are pollute and destroy environment and ecology with devastating impact on human health and bio-diversity worldwide.  To address the social problems or the problems of the stakeholders, the business community evolved a new approach in their business strategies named CSR and through CSR enterprises are intent to strike a balance between economic and social goals, where resources are used in a rational manner and social needs are be addressed responsibly.  CSR can be viewed as a comprehensive set of policies, practices, and programs that are integrated into business operations, supply chains, and decision making processes throughout the company and include responsibilities for current and past actions as well as adequate attention to future impacts. CSR focuses vary by business, by size, by sector and even by geographic region. The umbrella of CSR is quite big and it includes all the good practices that increase the business profitability and can preserve interest of all stakeholders. However, Lotus Holdings defines CSR as “The integration of the interests of the stakeholders – all those affected by a company’s conduct – into the company’s business policies and actions, with a focus on the social, environmental, and financial success of a company, the so-called triple bottom-line with the goal being to positively impact society while achieving business success.”  Thus, the whole range of stakeholders is considered as integral parts of CSR.  One important aspect of CSR is that it is not legal obligation but rather voluntary social and environmental positive initiative to establish an image of environmentally and Socially Responsible Business (RSRB) that also encompasses MSMEs as well as giant corporations. The motivation and drive to pursue is chiefly a result of pressure from well organized Consumer Rights movement, specifically in developed world that acts as a watchdog and hardly hesitates to impose Consumer Boycott against a company that violated established CSR practices. An Ideal example is the consumer boycott imposed on purchasing Bangladesh Readymade Garments on the ground that these are produced by under-aged child labor. Despite the fact that in the not so distant past, CSR was more of a charity by affluent or socially responsible business organizations without expecting any financial return, today, it very much a planned investment in creating positive image to enhance profitability.  Under CSR concept, companies decide voluntarily to contribute to a better society and a more sustainable environment. As evolved primarily in the western world, most of the rising companies there practice CSR to enhance the image and acceptability in the community (Green Paper, 2001). There are driving forces behind CSR that include; new concerns and expectations from citizens, consumers, public authorities and investors in the context of globalization. Social criteria are increasingly influencing the investment decisions of individuals and institutions both as consumers and as investors.  Increased concern about the damages caused to the environment by economic activities; transparency of business activities brought about by the media and modern information and communication technologies are all contributing to the changing scenario regarding CSR.  According to Green Paper, 2001, “Few trends could so thoroughly undermine the very foundations of our free society than the acceptance by corporate officials of a social responsibility other than to make as much money for the stockholders as possible.” (Friedman, 1962).