Corporate Social Responsibilty In Mauritius Management Essay

bodied kindly Responsibilty In Mauritius Management EssayThe European Commission tabulined bodily well-disposed tariff as a concept whereby companies integrate companioncapable and environmental concerns in their line of reasoning operations and in their inter cropion with their s apportionholders on a military volunteer basis.In several(prenominal) separate words, it concerns actions by companies over and supra their sanctioned obligations towards ordering and the environment. fit in to the European Commission reliable regulatory measures displace create a more conducive environment for system of ruless to voluntarily meet their favorable accountability.Similarly, the National Empowerment Foundation (NEF) defines incarnate societal obligation as the concept whereby companies act to equilibrize their own stintingal ontogenesis with the sustainable tender and environmental development of the country. An system that is upliftedly involved in CSR is one tha t goes beyond the legal compliance and actively practices positive impacts on the topical anesthetic anaesthetic communities and the environment. In fact, there is non a standard translation of in corporald favorable Responsibility as it is varies jibe to various countries and cultures. bodied hearty Responsibility (CSR) has become an important gist over the last two decades. justiceyers, practitioners, economists, and civil auberge restrain contributed to defining, under genuine, and analysing the content, record and implementation of CSR (P. R.Waagstein, 2011).CSR has been practiced by companies all over the world for numerous age as shown by many formula forers. At the beginning, it was more for cater well-being. For instance, during the industrial revolution and age, factories provided different facilities for the community surrounding them in come forwardrank to micturate use of their labour. Over the past few years, both melodyes and academician seeke rs stimulate shown increasing interest and enthusiasm for embodied societal Responsibility. For instance, look for done has suggested that CSR whitethorn be an efficient tool to meliorate the authenticity of companies amongst their stakeholders as per Handelman and Arnold (1999), and to develop positive accessible tariff images, according to Sen and Bhattacharya (2001).occupation STATEMENTThe edge CSR has, over years, been coined to allow the economic development of a country to participate in the socio-economic development. By being responsible for bon ton, the aforementioned(prenominal) industries were allowed to give back, in a responsible way, to people working for them and get their goods and services. Amongst the different levels of society, the emergence of need for different categories arose, for example, handicapped people, abandoned baby birdren, out fairnesss, the elderly and street people. Thus, merged affable Responsibility became a term used for catering t o all categories of humanitys and their wellness in the society.At the on coif, Corporate amicable Responsibility was a freewill initiative for companies to act kindly responsible. However, over the years, especially in the new millennium, since complete progress was non totally visible around the world, the united Nations proposed some millenary suppuration Goals to improve the general conditions of living. One of their main goals was to eradicate lordly scantiness in developing countries and underdeveloped countries. Indeed, the unify Nations Millennium Campaign, started in 2002, supports and inspires people from all four corners of the world to get involved and take actions in supporting the Millennium Development Goals. As articulated, the main challenges and study concerns of the International community is to eradicate absolute poverty, but this keister provided be done by the combined efforts of all governments, civil society organisations and the private field. As mentioned by the United Nations Secretary General cast away Ki-moon the goals atomic subject 18 ambitious but feasible and, together with the citywide United Nations development agenda, fortune the course for the worlds efforts to alleviate extreme poverty by 2015. The governance of Mauritius has established a policy with the objective of mandating registered companies to pay 2% of their book profit towards broadcasts that contribute to the social and environmental development of the country.In Mauritius, CSR has been formulated in the year 2008, when then the Minister of Finance tactual sensationated that companies should re direct 2% of their book profit towards societal development. To date, CSR has been practiced by companies for years and one of the main issues that arose recently is how to regulate it. Should it be a legal norm, ethical norm or social norm? This heading can be further elaborated Should CSR be regulated through defer regulation, code of conduct o r self-regulation? Should it be regulated in a voluntary way or should it be an obligation to corporations? Another question that a climbings is whether it is the quality of the private sector to take care or to look after the society, or whether it is the role of the government to do so, since all companies are paying levy and the main objective of a company is to exploit profits. In addition, on a different perspective, another question emerges should an organisation only centre on maximising profits or should its role as a socially responsible organisation withal ack forthwith directge looking after its society and the community?Matten and Moon (2008) offers a panoptic get wordation, arguing that it should be perceived both as a social imperative and social consequence of wrinkle success. concordly, two forms of CSR, implicit and explicit, let been introduced. Implicit CSR is embedded in various relationships among logical argument, society and government inside the p olitical system. It is represented by strong values, norms and rules or regulations which require corporations to treat stakeholder issues. It is important to disgrace that politics and organisations are interrelated and interdependent as they need each other to accomplish their social responsibility in an effective and efficient way. A textbook example in Mauritius would be the Compagnie Mauricienne de Textile (CMT) that has donated Rs 25m to the government for the new project of building a high tech school for vulnerable and deprived children.1.3 AIM AND OBJECTIVES OF THE STUDYThe depend of this investigate is to determine the importance of voluntary or compulsory CSR for the boilersuit socio-economic development of the country. In this context, the specific objectives are toTo assess the local opinion of CSR drivers and whether it is fall in as a compulsory or voluntary practice. This bequeath provide a course of action for the new Ministry of Social desegregation and st inting Empowerment.To provide for modifications in the local way of practicing CSR and to be able to answer queries of International organisations on eradication of poverty.To make recommendations so as to meet the targets set by United Nations and the Millennium Development Goals project, and to sheath Mauritius as a success example in Africa.1.4 SIGNIFICANCE OF THE researchIn fact, Corporate Social Responsibility is compulsory in Mauritius and this research primarily focuses on find the opinions, points of view and the experiences of companies that are actively enmeshed in CSR. Further assessment leave alone be do as to whether they prefer a voluntary or mandatory implementation and determining whether the local way of practicing CSR has benefitted society and provided improvements in the current way local companies are practicing CSR.In addition, it analyses the need for mandatory Corporate Social Responsibility in Mauritius and determines whether the government should ca rgo hold it mandatory or voluntary or both. It further develops the intellection of whether voluntary CSR should be modified to some other form to cater to the needfully of the Mauritian society.It also gives a comprehensive overview of findings and conclusions that will allow the local CSR committal and Government to review and improve its CSR policies for the country.1.5 RESEARCH QUESTIONSBased on the above research objectives of the study, the following research questions grow been formulatedHow organisations define Corporate Social Responsibility? sentiency of local CSR guidelines and what their opinions are and suggestions on the CSR guidelines?What problems they encounter while implementing CSR practices? How can the CSR Committee help in implementing CSR activities?How traffices perceive Corporate Social Responsibility as a mandatory practice in Mauritius. Should it be voluntary or mandatory?1.6 STRUCTURE OF THE DISSERTATIONChapter 1 IntroductionThis chapter provides a n overview of the topic research on Corporate Social Responsibility (CSR), and sets out the problem argumentation of the study, outlining the objectives of the research and highlighting the research questions.Chapter 2 Literature ReviewThis chapter reviews the belles-lettres relevant to the topic. It provides past reviews carried out by different researchers on Corporate Social Responsibility in various countries around the world. It also provides a description of CSR implementation in Mauritius and the similarities and contrasts that exist among the different countries.Chapter 3 methodologyThe methodology chapter outlines the methods and techniques used to conduct the study, namely the research begin, design and strategy used. Information about the target population including the sample size and swallow method is given along with details about the interview questionnaire.Chapter 4 Analysis and FindingsThis chapter presents the data analysis and research findings. The sour ce of data has been derived primarily from interviews that have been carried out. Further, discussions are based on the findings of this study.Chapter 5 Recommendations and ConclusionsIn this final examination chapter, appropriate recommendations will be made and the chapter will end with a concluding paragraph including the possibility for further or future research.CHAPTER dickens LITERATURE REVIEW2.1 INTRODUCTIONThis chapter presents an overview of the literature relevant to Corporate Social Responsibility. It provides a review of the past studies carried out by different researchers.The idea of social responsibility emerged in the United States at the beginning of the twentieth century. Carroll (1989) states three critical processing points in the evolution of social responsibilityThe Entrepreneurial Era contrastmen in America were building industrial empires and were abusing their power, being found guilty of antisocial and anticompetitive practices. Such practices include d levy evasion and other unethical production line practices. This caused frustration among the earth who soft their objections, causing the government to enforce laws whereby channel had a role to roleplay in society beyond profit maximisation.The Depression era of 1929- mid-thirtiesThe economy of United States was dominated by large organisations and the government passed laws to nurse investors and smaller businesses. In addition, the social responsibility of organisations was more micturately defined.(iii)The Social Era of 1960sThis era was characterised by social turmoil in the United States. The Government looked closely at organisational practices and it was clearly defined to whom the organisation was responsible and who in an organisation was responsible for the organisational practices.Bowen (1953) the pioneering advocate of CSR, described Corporate Social Responsibility in call of the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in basis of objectives and values of our society. (Social Responsibilities of Businessmen, 1953). The emphasis was laid on peoples conscience rather on the company itself. This alteration in focus was provoked by a number of factors much(prenominal) as the managerial revolution and the mounting antagonism of people experiencing social problems.The obligations were further elaborated upon, going beyond economic and legal implications by including the employee, the community welfare and the political and educational needs of society (McGuire, 1963). This gave rise to the modern concept of incorporated citizenship (Maignan, Ferrell, and Hult, 1999).The Committee for Economic Development (1971) viewed CSR as the service of a wide range of human values to improve the quality of deportment. The managerial role in changing societal expectations has also been articulated by the Committee. On one hand, Manne Wallich (1972) mentio ned that businesses should not spoil society but should provide solutions through voluntary impudence of obligations. On the other hand, Caroll (1979) summarised the discussion by providing the following definition social responsibility of business encompasses the economic, legal, ethical and discretionary expectations that society has of organisations at a given point in time.Figure 1 Carrolls classic gain (Carroll, 1991)Carrolls CSR benefit covers the whole perspective of what society can expect from a company, economically as well as socially. This theory can be used to cite a companys CSR activities and how they use CSR as a strategy. It will further explain and recognise the connection between a companys CSR activities and its stakeholders. Carrolls CSR Pyramid can be used as a tool to crystallize the different kinds of responsibilities that a company has to fulfil in order to turn over legitimacy from its surrounding society and stakeholders.2.1 Definition of Corporate S ocial ResponsibilityVarious organisations have viewed CSR in different ways, although there are right smart common opinions between them. affiliate to Mallen Baker (2004), CSR is about how companies manage the business processes to produce an overall positive impact on society.Lord Holmes and Richard Watts (2000), in their popularations Making Good Business Sense, defined CSR as Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while change the quality of life of the workforce and their families as well as of the local community and society at large. This publication also provides some evidence of the different perceptions of what this should correspond to a number of different societies across the world. It look upons cultural differences and finds the business opportunities in building the skills of employees, the community and the government through CSR.Corporate Social Responsibility Develo ping Countries and Overseas ExperiencesIn the year 2000 , the Millennium Development Goals set the challenge of Corporate Social responsibility in developing countries in view of eradicating poverty, hunger, providing better education to children, equal opportunities for women and a fitter environment (UN, 2006 3). Unfortunately, in many developing countries these global aspirations have remained unaccomplished.(Visser et al., 2007) viewed CSR in developing countries as the formal and informal ways in which business makes a contribution to improving the governance, social, ethical, labour and environmental conditions of the developing countries in which they pass, while remaining sensitive to prevailing religious, historical and cultural contexts.According to a survey done by Welford (2005) in Asia, research showed that countries such as Hong Kong, Malaysia and Thailand where indicative of having less prevalent CSR activities. Malaysia is considered as the weakest in terms of CSR performance, with Thailand being relatively strong on external aspects (such as child labour and ethics) and Hong Kong being mostly better on internal aspects (such as non-discrimination and equal opportunities).It was determined through a review done on CSR literature (Visser et al, 2006) that only 12 out of 53 countries in Africa have publications in CSR journals and that 57% of looseed articles focus on South Africa with 16% focusing on Nigeria.On one hand, CSR in the United States has been defined mainly in terms of a good-hearted model. Most companies focus on making and maximising profits and only contribute to gracious activities in an effort to benefit from tax concessions, contributing a certain share of the profits to charitable institutions. They hope that receiving any benefits from charitable manduction would tarnish the reputation of the company. On the other hand, the Canadian Governments perception of CSR is generally understood to be the way a company achieves a balance or integration of economic, environmental and social imperatives while at the aforesaid(prenominal) time lectureing shareholder and stakeholder expectations.According to Cecil (2008), disclosure of CSR in the United States does not currently exist and is therefore unregulated as a necessitate framework. In fact, various models and categories of pass overing do exist under the umbrella of CSR, such as environmental reports, social reports and sustainability reports. Therefore the CSR report is severalise from the yearbook report and represents non-financial qualitative and quantitative data.In contrast to other developed countries, Corporate Social Responsibility in the United States is not forcefully impose. Companies in the United States participate in CSR based on their own moral and social values, allowing them to apply the triple-bottom-line approach voluntarily. In comparison, the laws of Mauritius state that it is mandatory for profit bearing organisations to pay the government 2% of their annual book profit as a CSR contribution. While companies in the United States have no mandatory obligation towards CSR, they widely exploit the CSR curriculum as a means of increasing their public image and corporate reputation. Given the fact that CSR in the United States is non-mandatory, companies can define and reckon their views of social responsibility within the context of own their company. Having this freedom has allowed them to better measure and promote CSR activities in comparison to their International counterparts.It is interesting to note that although companies in the United States are very explicit in their public statements with relation to their commitment to corporate responsibility, the lack of precise definition has led to perplexity in terminology. A wide range of terms for CSR now exists, such as social responsibility, community enthronisation and corporate citizenship. each company tends to define them differently, yet ha ving little understanding of what they actually mean, whether that is beneficent giving, raw material sourcing or employment practices. Mauritius in comparison, although less developed than the United States, has a well-defined CSR programme as the mandatory enforcement of social responsibility has led to a single, precise and distinct perception thereof.The Government of the United earth interprets CSR as the contribution a business makes to their sustainable development goals in terms of how they account for economic, social and environmental impacts. According to I. Pearson, Minister of the state UK, the world is experiencing major economic challenges and the issue of Corporate Responsibility must remain high on business and political agendas. He states that most successful companies have always been the most responsible. Business leaders recognise that Corporate Responsibility makes good business sentience and it attracts the best talent, earns the effrontery of customers an d the community and acts as a powerful investment for long-term sustainability. However, just like the United States, and in contrast to Mauritius, CSR is voluntary in the United Kingdom.The Government of the United Kingdom has adopted the voluntary approach as they believe it will motivate and encourage Corporate Social Responsibility through best practice guidance, and where appropriate, regulation and financial incentives. In the United Kingdom, CSR is viewed as a voluntary activity that should address both competitive and social interests. Mauritius does not share this approach and stock-still encourages companies to contribute above the legal requirement to benefit the community and environment, invest in education and to help eradicate poverty.The question of whether or not CSR should be considered mandatory emerges when we consider that countries like the United States and the United Kingdom have no such legal compliance obligations. Why would a country like Mauritius, bein g a small island in the Indian Ocean, apply CSR as compulsory, especially considering that Mauritius is only the s country in the world where CSR is mandatory?NRE (Nouvelles Regulations Economique) law introduced in France in 2001 requires that all publically listed French companies disclose information to their stakeholders pertaining to social and environmental impacts on their activities, together with their annual reports. There is no requirement for any specific constraints to be included with regards to their standards, thresholds or any other regulatory requirements.Although the law has been introduced, it should be considered as a soft law since the disclosed information is not regulated and there are no clear rules with regards to non-compliance. The legal responsibility is to report on social and environment impacts but without the requirement for proof of the disclosed information. In addition, the law does not clearly outline assertable sanctions that may be imposed in cases of non-compliance or falsification of information.According to the research presented by L. Drusch and A.Lioui (2010) there has been a rapid growth in Corporate Social Responsibility in France over the last decade. This growth can be measured by the increase in the number of French companies that are listed in the Socially Responsible Investment (SRI) proponent in France as well as the listing of French companies in International CSR rankings, such as the 100 Most Sustainable Corporations in the World listing.Like the United States, CSR in France is based on the triple-bottom-line approach and is aimed at improving social, economic or environmental aspects in society beyond financial motivation. In addition, the United States does provide CSR reporting to some extent although not regulated and submitted in a separate report to the annual statements.In July 2007, Indonesia enforced a mandatory regulation regarding corporate social responsibility, being the first country in the world to do so. Based on the research done by Rosser et al (2008), Indonesia promotes CSR to local small and medium enterprises as a way to reach US and European markets.As compared to Mauritius, where the obligation is to pay 2% of the book profit, Indonesia has imposed a 3-5% obligation to be paid to the government. According to empirical data, the CSR law in Indonesia requires revision and improvement due to misinterpretations thereof, as well as lack of a precise definition.The law created a fierce contention and was heavily challenged as being nothing more than a munificence tax that was detrimental for business. Those challenging the law argue that there is no need to regulate CSR as sectorial rules have already been defined and introduced to regulate corporate responsibilities, such as the Environmental Law, Labour Law and Investment Law. The law is very unclear with regards to the governments expectations and has no clear definition of CSR. Unlike France, the law in In donesia does stipulate penalties for non-compliance.Grafstrm et al (2008) identify that over the past three decades, the term CSR has been extensively debated by companies and in academic circles across the globe with a common goal to identify a definition of CSR that all and sundry can collectively agree upon.Kemp et al (2001) observed that companies were hesitant to divulge their actual CSR activities due to the confusion that the term has produced over the past years. It was found that companies are reluctant to publish their activities for fear of reprisal by the media and nongovernmental organizations should their approach be erroneous.Carroll (1998) found that companies often interpret regulations incorrectly and that laws often create a hindrance rather than improving economic performance.Although Mauritius followed Indonesias stance on mandatory CSR, being only the second country in the world to do so, the differences between the two countries can be easily identified. When the law was introduced, Indonesia faced fierce disapproval and the mandatory requirement is still an on-going debate. It remains mostly a disorganised and be amiss concept whereas Mauritius appears to have a clearly understanding of what CSR actually entails as opposed to simply being a governmental tax requirement. The macrocosm of CSR into the Mauritian business environment was done so with a clear understanding on the benefits to business success, reputation and the social impact that such contributions would make on the island. Many are of the opinion that even if CSR was not mandatory in Mauritius, most organisations would still voluntarily contributing to CSR as a good business practice.Like Indonesia, India faced strong comment when trying to impose mandatory CSR obligations in 2011. Their intention was to make it mandatory for companies to contribute at least 2% of net profits to the government. In July 2011 the Indian government backed down and made CSR contributions vol untary by recasting it as responsible business and issuing a set of guidelines for companies released on July 8th 2011 by the then Union Minister of Corporate Affairs, Mr. Murli Deora. The debate surrounding the mandatory CSR in India continues and the government has requested that companies keep records of their CSR spending in order to disclose to their stakeholders.The Companies Bill 2009 contains many commissariat but none more debated than CSR. Salman Khurshid (the current Union minister for law) and Deoras predecessor, initially a mandatory CSR enthusiast, swayed his views that if CSR contributions were publicised, they would create competitiveness between organisations that in turn would encourage contributions.The Federation of Indian Chambers of Commerce Industry (FICCI) suggested tax concessions to companies who reached voluntary targets. The Confederation of Indian Industry (CII), a rival of the Indian Chambers, snarl that mandatory corporate responsibility would be co unterproductive, arguing that companies may resort to camouflaging activities to meet such regulations, particularly during recessionary periods and economic downturns.Indias philanthropic community does not support mandatory CSR. According to research, the chief operating officer of the NGO Give India viewed this as a crazy idea. He believed that once CSR is made mandatory, people will find ways and means to get out of it. The rules would be so vague that the reporting would be even vaguer. The CEO and co-founder of the Dasra foundation agreed. He was not in favour of mandatory CSR. He felt that when you make things mandatory, the chance of them not being done would be greater.Philanthropist Rohini Nilekani strongly opposed mandatory CSR believing that it was just outsourcing of governance. She felt that if wanted, the corporations should be taxed and the money put into social programs but that CSR should not be dictated.Corporate giants, TATA and BIRLA, have practiced Corporate So cial Responsibility actively, decades originally the term CSR became popular in India. Even still, CSR remains misunderstood in the Indian Development Sector. Only a few private and public companies apply CSR and those that do tend to have International shareholding from countries where CSR is considered a business best practice.India attempted to follow in the footsteps of Indonesia and Mauritius by imposing mandatory CSR regulations, the only other country to have actively considered such enforcement.It seems explicit from the various researchers and the review of the various approaches and overseas experiences that there is a label difference in the concept and interpretation of CSR world-wide.Mauritian ContextIn Mauritius, private organisations are reputed to have an extended culture and tradition of CSR, principally in terms of voluntary social engagement in the communities where they operate and in the society at large. They have participated and contributed over the years to the social and environmental development of the country. Previous survey reports published by the Mauritius Employers computer storage (MEF) in 2006 and 2008 indicate that Mauritian businesses in their large majority believe that their role in society extends beyond wealth generation and that prosecute economic interests needs to be balanced with social and environmental responsibility. Indeed, Mauritian enterprises have been engaged in both internal and external CSR, dictated mainly by ethical considerations, employee motivation, company reputation and brand positioning. They have also taken into consideration benefits of employees and engaged in external CSR initiatives by contributing and supporting social and community related activities. The MEF Surveys have also shown that CSR has followed a rather philanthropic approach, characterised by informal activities, unrelated to business operations and strategy.The recent economic and financial crisis has led to a rise in the le vel of involvement of governments in the operation of the business sector across the world. There is also an emerging debate in the Corporate Social Responsibility literature with regards to the role of the state in the business relationship. Despite the efforts made by government and International agencies, the global poverty problem is worsening day by day. Thus, the contribution of organisations to Corporate Social Responsibility for the creation of a better society is rising.Corporate Social Responsibility Mandatory in MauritiusAccording to Y.Ramtohul (Sept 2011), on one hand, in Mauritius, all companies such as those holding a Category 1 Global Business Licence under the Financial Services Act, banks in Mauritius whose income is derived from banking transactions with non-resident or corporation holding a global business license under the financial, IRS companies as mentioned in the investment promotion ( accredited Estate Development Scheme) Regulations 2007, as well as any no n-resident societe , a trust or a trustee of a unit trust scheme are exempted from mandatory obligation from contributing to the CSR fund.On the other hand , all other companies incorporated and registered at the Registrar of Companies of Mauritius have to contribute 2% of their annual book profits to the CSR fund as provided by the S 50L of the Income impose of Mauritius ( Act 16 1995). According to the S 50L of the same Act the 2 % that goes to the CSR fund shall be used to every implement an clear programme by a company, an approved programme under the National Empowerment Foundation or to finance an approved NGO.It is the responsibility of the CSR committee to review these programmes or NGOs to be financed as set up under the S 50 L section of the Income Tax in order to have a better control and enhancer about the investment made. It is also interesting to understand that if, in respect to a year, the amount paid out to the CSR fund is less than 2% then the difference shall b e remitted as an income and will be taxed at the end of the financial year.Statutory RequirementsAs from July 2009, companies in Mauritius therefore have the legal obligation to contri