The law on mandatory csr management essay

ContentsList of TablesList of Figures

Acknowledgements

Abstract:

The social responsibilities of organizations to the greater society have been debated for years, and the expected role of organizations and their social contract appear to be changing. Even though more and more organizations are incorporating CSR, it remains poorly understood how and to what extent these initiatives contribute to the well being of the organization. An empirical analysis of British American Insurance ltd [BAI Co (Mtius) Ltd] has been conducted.The approach to internal CSR by organizations in Mauritius is somewhat similar to CSR in general with a majority of organizations without any formal policy on internal CSR. Internal CSR which pertains largely to “people management” is the responsibility of the HR function. Given that the majority of organizations in Mauritius do not have the required HR maturity and that many organizations still operate with a “personnel management” philosophy, this partly explains the state of internal CSR in Mauritius.However, our study shows that the selected company, BAI Co (Mtius) Ltd has incorporated CSR, and that familiarity with the term CSR and involvement of CSR activities were relatively high as per the employees of the company.

Introduction:

Employees’ expectation is to have ‘good’ employers, customer’s expectation is to have ‘fair’ products and the society’s expectation is to have ‘generous’ and ‘environmentally sound’ companies. Businesses are no longer governed by shareholder value alone; their decisions are mainly influenced by their responsibility towards employees, customers, the environment and the society they operate in.Analysts and rating agencies no longer focus on revenue and profit only, they are also starting to examine whether a company’s profits were generated by applying ecologically and socially sound principles. Employees, customers and the wider public also want to know how a company manages its business. Nowadays more and more businesses around the world and also in Mauritius envisage a development which takes economic, social and ecological aspects into account and treats them equally.Unlike corporate social responsibility, sustainability refers not only to a company’s responsibility towards its stakeholders, taking into account economic, ecological and social aspects, but also to its responsibility towards humanity as a whole, towards the environment and towards future generations. CSR is an integral element of sustainable corporate governance.Despite much research on the topic [see Griffin and Mahon (1997), Orlitzky (2001), Orlitzky, Schmidt, and Rynes (2003), Margolis and Walsh (2003), and Margolis, Elfenbein and Walsh (2007) for reviews of the literature], few firm conclusions can be drawn, except that the literature is divided. While there appears to be more support for the view that CSR activities are positively related to profitability and firm value, a large number of studies find the opposite relation. As a result, the normative implications of research on corporate social responsibility are still uncertain.

CSR in Mauritius

The European commission defines corporate social responsibility (CSR) as a concept whereby companies voluntarily incorporate social and environmental activities in their business procedures and in their dealings with their stakeholders.Research has demonstrated that that CSR is on the way to be embedded in the corporate culture in Mauritius. However, many companies in Mauritius still indulge in sponsorship and philanthropy, or else carry out activities with a social objective on a rather ad-hoc basis. But CSR is inexorably emerging as a priority for businesses in Mauritius. The first quarter in 2008 has been marked with various organizations engaging in CSR. This can be explained by the fact that companies have realized that CSR can be more than a cost, a constraint, or a charitable deed – it can be a source of opportunity, innovation, and competitive advantage (Porter & Kramer, 2006).As CSR encapsulates the interest one and all in terms of economy, ecology and social enhancement, therefore CSR is stirring more and more interest among organizations in Mauritius. However, it is not being done in a systematic and formal manner. Only a few organizations adopt a formal approach and structure to launch and manage social projects. This is a key issue for authorities to address in order to improve the state of CSR in Mauritius as more importantly; it has also been exposed that there is a strong positive relationship between existence of a formal CSR policy and engagement in strategic CSR partnership by organizations at community and national level. Because of the global trend the government of Mauritius has chosen to include a mandatory form of CSR in the legislation of Mauritius.

3.1 The law on Mandatory CSR

The S50L of the Income Tax Act of Mauritius (Act 16 of 1995) provides that all companies incorporated and registered at the Registrar of Companies of Mauritius have to contribute 2% of their profit representing tax for the improvement of CSR.The S50K of the Income Tax Act of Mauritius (Act 16 of 1995) provides that all companies must have a CSR fund that will be used to finance specific programmes. It also provides which companies are to be involved in CSR and how much and when to contribute to this fund.It can be noted that the main objective of this law is probably to order the registered companies in Mauritius to pay 2% of their annual book profit towards some well-defined programmes that is a contribution to the social and environmental progress of the country.It was discovered from recent researches that Mauritius is the only country where there is the obligatory payment of the 2% of tax after profit in favor of the development of CSR.Therefore, the question which arises is whether firms consent with this decision of the government or it is just to abide by the law.Whenever there are no legally binding international or national mechanisms to create, implement, enforce, or monitor corporate social responsibility, thus we may deduce that companies engage in social and environmental practices, they are acting voluntarily, not because of regulations.According to the Mauritian guidelines on CSR, the intentions of this law are as follows:To encourage companies to handle their own activities and procedures, which impact the connection of economic with social and environmental enhancement.Make easy the input of businesses to support existing Approved National Programmes used by companies, national agencies and NGO’s.Promote a functional community on NGO’s with corresponding work tactics that are appropriate to the national development programme.

3.2 Activities which do not form part of the definition of CSR in Mauritius

The following activities do not meet the CSR criteria in Mauritius:Contribution for religious activitiesContribution to activities discriminating in regards to race, political opinion, place of origin, color or creed.Contribution to Trade UnionsSponsorship for marketing purposesContribution for political partiesShareholders benefits (shareholders holding more than 5% of shareholding)Senior Staff benefits – Schemes benefiting staff and/ or their family members and Staff welfare cost (which consist of the current and the future staff training costs)Those activities which are in opposition to public safety and national interest.

BAI Co (Mtius) Ltd

The company launched its operations in Mauritius in 1969, as a small branch of British American Insurance Kenya. After some years, the company extended its activities geographically in Mauritius while setting up of a wide set of innovative products and services for the interests of Mauritians. The company has been placing a lot of importance on being close to its client base and this today can be proved with a network of over 22 branches and sales offices across the Mauritius and in Rodrigues Island.BAI Co (Mtius) Ltd is the leading life insurance provider in Mauritius with a market share of over 45%.BAI currently has more than 125,000 policies in force with over 20 tailor-made insurance products.The company currently employs over 600 staffs, including qualified agents who are regularly trained, developed and certified.BAI provides a diversified choice of products and services to both individual and corporate such as group life, group health and group pension schemes which are offered to corporate. These plans allow employers to offer cost-effective protection and savings to their staff and a range of pure life, endowment and health plans are offered to individuals.The company also has subsidiaries in Kenya and Malta and will soon start to operate a new branch in Botswana, which is expected to open in 2013

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BAI forms a significant part of a multi-sector conglomerate, British American Investment Co. (Mtius) Ltd., which has more than 4,000 employees, and currently ranks second in the local Top 100 companies in Mauritius and seventh in the Indian Ocean.

Research Objective

The main objective of this dissertation from the analysis of gathering data on CSR is, to critically look on the significance of Corporate Social Responsibility in the philosophy of BAI.The dissertation will also attempt to:To analyze the data from BAI relating to its CSR practices.To identify the indicators used by BAI to target their performance on CSR in the organization.To make some conclusions and make recommendations about the state of CSR in BAI.

Structure of the dissertation

The dissertation is structured as follows:

Part 1: Introduction to the research study, followed by an introduction to the BAI Co (Mtius) Ltd.Part 2: Contains the literature review, it critically reviews previous work done in this particular research area.Part 3: Draw attention to the research design and the data collection process used by the researcher.Part 4: An analysis of the data collected together and some findings as well as discussions of the research area are also provided.Part 5: The conclusions and the recommendations based on the findings in the course of carrying out the dissertation.

Literature Review

While corporate social responsibility (CSR) was broadly discussed in the last forty years of the twentieth century, the thought that company has societal commitments was obvious at least as early as the nineteenth century.Corporate Social responsibility (CSR) is a generally used term in business circle at present. As per Nexen (2009) CSR is a commitment to act in an ethical manner and contribute to economic growth and at the same time improving the quality of life of the employees and their families and also to the local community at large (Nexen, 2009). Kotler & Lee (2004) identified CSR as commitment to improve community well-being throughout discretionary business activities and contributions of the corporate resources (Kotler &Lee, 2004, p.3). But the above two descriptions seem to be too narrow as the CSR has wider facets to deal with apart from the ones cited above. The definition of Eufin.org (2009) seems to be more suitable than the two mentioned above. Eufin.org (2009) defined CSR as a concept companies take themselves to reflect social and environmental concerns within their activities and in their relations with the diverse corporate stakeholders (Eufin.org, 2009).Since the company is working in a society, it cannot stay away from the social issues. The society provides both customers and resources to fulfill the business objectives of the corporate companies (Hawkins, 2006, p.2). A vital aspect of CSR is how businesses cooperate with their internal and external stakeholders that is, employees, customers, neighbors, nongovernmental organizations, public authorities, etc (Enterprise and Industry, n.d). Any problems occurred in the society can have an effect on the organization as well and consequently the wellbeing of the society is the responsibility of the organization also. Since the companies are making use of massive resources of the society, they should take the responsibility of serving them as well. Providing employments to the public only need not be the responsibility the organizations should undertake. They have a lot wider aspects to cover as far as the strength of the society is concerned. Furthermore, the society has already accepted the tension between corporate rationality and social responsibility as an inescapable condition of living prosperously (Steven et al, 2007, p.17) and the companies should respect that.In recent years the business strategy field has experienced the resurgence of corporate social responsibility (CSR) as a main topic of interest. The concept has not surfaced for the first time. CSR had already known significant interest in the 1960s and 70s, spawning a broad range of scholarly contributions (Cheit, 1964; Heald, 1970; Ackermann & Bauer, 1976; Carroll, 1979), and a real industry of social auditors and consultants. However, the topic all but vanished from most managers’ minds in the 1980s (Dierkes & Antal, 1986; Vogel, 1986). Having blossomed in the 1970s CSR all but vanished and only re-emerged in recent years.CSR resurfaced vigorously over the past ten years as a result of a mounting public concern about globalization. Firms find themselves held accountable for human rights abuses by their suppliers in developing countries; interest groups request that corporate governance should be transparent and accountable; rioters from Seattle to Genoa protest violently in opposition to the cost of free trade and other perceived negative consequences of globalization. Nevertheless, nearly two decades of neglect have helped to undo much of the past accomplishments of corporate social responsibility. It is in consequence no surprise that both practitioners and scholars are struggling once again to respond to the question of what the strategic implications of CSR are.Globalization has enormously augmented corporate power- shrinking the state and making the global corporation certainly the most influential of our modern institutions (Visser et al, 2008, p.6) In fact in some countries the corporate companies are even influential than the governments itself. So such companies can do a lot for increasing the levels of the poor in that country. Poor countries always welcome big corporate companies to their soil in order to catch the attention of foreign investment and to boost up their economy. These big companies should become conscious that they have a double role to play in such countries like; making profit and also to help those countries in improving the economy standards of living of the poor. Companies play significant roles in public policies not only in countries where standard of governance is low, but also in countries in which the international governance mechanisms are low (Blowfield & Murray, 2008, p.11).The positive association between CSR actions and corporate financial performance is also well supported by a lot of studies including, Alexander and Buchholz (1978); Cochran and Wood (1984); Waddock and Graves (1997); Stanwick and Stanwick (1998); McWilliams and Siegel (2001); Arx and Ziegler (2008) and Rettab et al. (2009).The notion of CSR was at first advocated by Beyer (1972) and Drucker (1974) while stating that corporations should do social activities for the wellbeing of the community and feel sense of self-ombudsmanship. It was argued that corporations are getting colossal amount of profits from community and deteriorating the natural resources, for that reason they should contribute for the sustainability of the environment and other natural resources and work for the uplifting of the society. Freeman (1970) opposed the idea of CSR by stating that corporations are neither meant for social activities nor they have expertise in this management, therefore it is better that they produce quality products for consumer obey legal rules and regulations and contribute in the economic Ali et al. 2797 development of country. Many researchers including Sturdivant and Ginter (1977); Stanwick and Stanwick (1998); Fombrun, Gardberg, and Sever (2000); Maignan and Ferrel (2001); Bromley, (2002); and Kashyap, Mir, and Iyer (2006) agreed with the concept of CSR by corporation and endorsed that such actions of corporations should also be reported for the information of consumer, community, competitors and the government. Plenty of researches and advancements were taken to the corporate world, as well as its various effects on corporations, techniques of reporting CSR. Researches on CSR including Sturdivant and Ginter (1977); Churchill and Surprenant (1982); McWilliams and Siegel (1995); Porter and Van der Linde (1995); Hart (1995); Judge and Douglas (1998); Klassen and McLaughlin (1996); Stanwick and Stanwick (1998); Fombrun et al. (2000); Maignan and Ferrel (2001); Bromley, (2002); Hart et al. (2003); Paine (2003); Kashyap et al. (2006) Guo, Sun, and Li (2009); and Ali et al. (2010) emphasized on the significance of CSR for the satisfaction and retention of diverse stakeholders and sustainable corporate performance. These studies were performed in different contexts including CSR and financial performance, consumer behavior and employee behavior.The concept of CSR was formalized in the middle of the previous century (Bowen,1953; Heald, 1970) and many evaluations detail its progressive theory-building process (Carroll, 2008; Lockett et al., 2006; Walsh et al., 2003; Wood, 1991).Employees as a unit of analysis have received limited attention in past CSR literature (Aguilera et al., 2007: 839; Rupp et al., 2006; Swanson & Niehoff, 2001). Past CSR and HRM research has mainly focused on relationships between leadership and corporate social behavior (Swanson, 2008; Waldman, Siegel & Javidan, 2006), or defined socially responsible leadership (Waldman & Siegel, 2008). Although some theoretical models of Corporate Social Performance explicitly included employees as a level of analysis (e.g., Wood, 1991), only a few studies have examined CSR‘s influence on employees’ attitudes and behavior.Numerous studies have focused externally, looking at the influence of CSR on prospective employees. These works, which tend to be based on signaling theory (Spence, 1973) and social identity theory (Ashforth & Mael, 1989), suggest that a corporation‘s socially responsible practices send a positive signal to potential workers. The workers, in turn, are likely to get identified with a responsible organization, especially if their values correspond with promoted practices (Strand, Levine & Montgomery, 1981).These studies show how a socially responsible reputation influences corporate attractiveness for prospective employees such as undergraduates, or MBA students (Albinger & Freeman, 2000; Blackhaus, Stone & Heiner, 2002; Greening & Turban, 2000; Luce, Barber & Hillman, 2001). CSR‘s effect on organizational attractiveness is stronger for job seekers who have many job choices (Albinger & Freeman, 2000), and when they have prior knowledge of CSR and/or are directly concerned with the issues addressed by CSR (Blackhaus et al., 2002).Strand et al. (1981) demonstrated that to conclude how improved societal or environmental corporate performance affects organizational attractiveness for applicants, it is compulsory to consider both job and organization attributes.Other studies have established that diversity programs can influence job choices among women and/or people from ethnic minorities (Ng & Burke, 2005; Smith, Wokutch, Harrington & Dennis, 2004).Recently, researchers have investigating how CSR may influence incumbent employees.These studies provide strong empirical support for CSR‘s influence on employee (or organization) commitment (Aguilera, Rupp, Ganapathi & Williams, 2006; Brammer, Millington & Rayton, 2007; Maignan & Ferrell, 2001; Maignan, Ferrell & Hult, 1999;Peterson, 2004).Except for Aguilera et al. (2006)‘s study that includes CSR impact on job performance and Valentine and Fleischman‘s (2008) paper that focuses on perceived CSR influence on job satisfaction, no studies have explored CSR influence on employees‘ attitudes and behavior beyond organizational commitment. These works build on social identification as a mechanism to explain CSR‘s influence on employees, either explicitly (Carmeli, Gilat & Waldman, 2007), or implicitly (Valentine & Fleischman, 2008). Yet recent research suggests that CSR may influence employees through other mechanisms than identification (e.g., social exchange), and that CSR may influence employees’ attitudes, needs and behaviors other than commitment (Aguilera et al., 2007). Swaen & Maignan (2003) suggest that CSR can directly influence employees‘adoption of socially responsible behavior within corporations.Previous research on socially responsible behavior took two distinct and parallel paths, that explains the present knowledge gap on CSR‘s influence on actual employees (Swaen & Maignan, 2003; Swanson & Niehoff, 2001). ‗Macro- level‘research took organizations as its main unit of analysis, focused on CSR‘s financial impact, and developed its work under the CSR‘ umbrella construct (Margolis, Elfenbein & Walsh, 2007; Margolis & Walsh, 2003; Orlitzky, Schmidt & Rynes, 2003). A micro-level‘approach took individuals as the unit of analysis and did not refer explicitly to employees‘socially responsible behavior (Schneider, Oppenheimer, Zollo & Huy, 2004; Treviño Weaver & Reynolds, 2006). Researchers generated concepts potentially useful to investigate behaviors such as Organizational Citizenship Behavior (hereafter OCB). These two different approaches to previous research have prevented cross-fertilization between micro- and macro-level analyses of CSR literature (Aguilera et al., 2007; Schneider et al., 2004; Treviño et al., 2006; 977- 979).

7.1 Customer views on loyalty based on CSR.

Crespo, H, et al (2005, p.1) argued that customer loyalty and valuation of a variety of business services is very much influenced by Corporate Social Responsibility. It was recognized that Corporate Social Responsibility possessed a lot of authority on the customers’ behavior. This was done throughout the recognition of the various aspects of social responsibility from the opinion of consumers and the influences of each of the aspects in the global assemble of social responsibility. It is not, nevertheless simple for customers or consumers to memorize and get hold of information regarding a company’s social responsibility.According to Luo, X and Bhattacharya, C (2006, p. 1-10) it was made sure that for example, in the mobile telephone services sector, there were an extremely strong link among the consumers or the clients who used the services and the firm for the reason of the existence of inseparability, intangibility, perishability and heterogeneity when compared to other tangible products and, consequently, the user, not only move toward the purchase in a different way but also sets up a stronger and direct cordial connection with the service suppliers. From this study it was recognized that the multidimensional character of CSR had an immense authority on the judgment of users or customers. There was, as a result, a direct existence of relation between the opinion of the customers as well as in the service valuation and social responsibility.

7.2 How CSR enhanced the image of various business enterprises? :

From an article published by the Harvard Law School on Financial Regulation and Corporate governance, it has been established that actions, which were associated to Corporate Social Responsibility had a bigger potential in the establishment of a variety of kinds of value which were distinctive to the customers. It was through the view of customers towards this value that can link the relationship between a company’s CSR activities and its consequent performance in finance. It is also in the course of this article that it can be ascertained that CSR boosts a business firms’ profitability due to an increase in loyalty of the customers, lower risks for the firm’s image during crisis and readiness to pay the premium prices (Chandler, 2010, p.48-50).The implementation of Corporate Social Responsibility is beneficial for business organizations and for the reason that it goes ahead to improvement in financial performance by the company, to an increase in customer loyalty and sales, a reduction in regulatory oversight, to workforce diversity, to a reduction in liability, to a better access to capital and product safety, a better ability in attraction and retention of human resources by the company, to a fall in operational costs, a better quality and higher productivity and an improvement in brand image and brand reputation among others (Joyner and Pyane,2002, p. 297-311).

7.3 The Strategic decisions which business organizations has to face when trying to enhance their performance of CSR:

Many business enterprises have at once been faced with an uphill task to come to a decision on whether they should accept and also apply the use of Corporate Social Responsibility in their activities. On the other hand, majority of the business firms have totally brought their support to the adoption and use of Corporate Social Responsibility for the reason that there is a variety of advantages that comes up as a consequence of its application. Business firms who have not succeed in the implementation and in applying CSR within their activities have justified this failure to lack of funds to enable the use of diverse stratagems and a poor management or leadership techniques of the business managers or leaders.The literature on CSR and innovation illustrates on a number of diverse theoretical traditions, which regularly contradicts each other. Wood (1991) illustrates three levels of analysis: institutional, individual, and organizational.

7.3.1 Institutional Level: CSR as Organizational Legitimacy

Davis (1973) clarifies the iron law of responsibility, as the fact that firms applying power will ultimately be held accountable by society. At this level CSR can be best understood as a search for organizational legitimacy. Firms are under the responsibility not to abuse the authority invested on them by society or they risk losing society’s implicit endorsement. More recently this point of view has resurfaced as a firm’s requirement to keep hold of its “license to operate” (Post, Preston, & Sachs, 2002: 21).

7.3.2 Individual Level: CSR as Moral Choices of Managers

At the individual level, CSR has been raised by Ackermann (1975) as managerial discretion. In relation to this view managerial actions are not totally defined by corporate policies and procedures. Therefore even though managers can be constraint by their work environment, they however have to think about the moral effects of the decisions they take. The vision of CSR is robustly anchored in the business ethics literature (Jones, 1991; Donaldson & Dunfee, 1994; Crane & Matten, 2003).

7.3.3 Organizational Level: CSR as Stakeholder Management

With Freeman’s (1984) seminal book the focus shifted from legitimacy and morals to a new theory of the firm. Social considerations are as a consequence no longer outside an organization but are part of its purpose of being. CSR in consequence turns out to be a question of stakeholder ‘identification’, ‘involvement’, and ‘communication’ (Mitchell, Agle, & Wood, 1997; Morsing & Beckmann, 2006; Morsing & Schultz, 2006).”The purpose of stakeholder management was to devise a framework to manage strategically the myriad groups that influenced, directly and indirectly, the ability of a firm to achieve its objectives.” (Freeman & Velamuri, 2006)The intention of stakeholder management is hence to examine how a company can serve its customers and be rewarding while also serving its other stakeholders such as suppliers, employees, and communities.In recent times the stakeholder point of view has dominated the reinterpretation of CSR pushing the question of the legitimacy of corporate power as well as the moral dimension of managerial decisions more into the background.

Research Methodology

There exist a variety of research methods that could have been used to collect data and information on the subject of Corporate Social Responsibility. Hence, we have therefore got experiments which are frequently employed in exploratory research. Making use of experiments as a method of data collection is expensive and is also time consuming and therefore it is not the best to be used as method for collecting data in Corporate Social Responsibility. So as to establish the empirical relationship that subsists between the different parameters in a research, employing observation as a research method seemed to be suitable despite the fact that it is also expensive and time consuming, but once again it is not appropriate for the subject of CSR.Using existing data can also be employed as a method of data collection although its exactness will depend on the experience of the researcher using it. In our case, we will use existing data to determine the recent CSR activities of BAI Co (Mtius) Ltd.In our case, surveys are the most appropriate research methods that can be utilized in the exploratory or empirical research in business studies and in Corporate Social Responsibility. To be able to achieve research results, some group of people in particular, such as for example business leaders or managers charged with the duty of adopting CSR in a business can be interviewed or provided questionnaires.To make use of questionnaires is hence, very much recommended in ensuring that the aims of this research study to be successfully achieved since they have also proved to be suitable in other previous studies.Questionnaires were circulated to SVPs, AVPs, business managers and leaders responsible for CSR as well as employees and were requested to fill in the appropriate information.

Corporate Profile BAI Co (Mtius) Ltd

British American Insurance is a responsible corporate citizen with a Board of Directors who is committed to the principles of integrity and accountabilityThe CSR programme focuses on three key elements:HealthEducationEmpowerment of womenAs from end 2012 BAI has also planned to be engaged in the following fields also:Eradication of Absolute PovertyProtection of the EnvironmentChild protectionFight against drug addiction.

9.1 Health

Table CSR INITIATIVES – HEALTH

HEALTH

Date

Event Name

December-10

Signing of MOU with MDA

BAI signed a Memorandum of Understanding (MOU) with Mauritius Diabetes Association (MDA)

December-11

BAI CSR Cheque Handing-over Ceremony

A cheque handing-over ceremony to 6 NGOs:

1. Association des Parents de Déficients Auditifs (APDA)2. SOS Children’s Villages Mauritius3. Mauritius Thalassemia Society4. Southern Handicapped Association5. Muscular Dystrophy Association6. EDYCS Epilepsy Group

A fund of MUR335,000 was donated to these organizations which are considered to be vulnerable groups, in order to help them to complete their activities for the year 2011.

August-11

Health Open Day Event 2011

With the collaboration of Apollo Bramwell Hospital (ABH), Apollo Bramwell Nursing School and The Mauritius Diabetics Association (MDA), BAI offered free diabetes screening, BMI test (Body Mass Index) and eyes checking at different BAI branches across the island.

April-11

Joie de Vivre Universelle

BAI held a ceremony for the renovation of an educational and medical centre.All paint products and painting equipment needed for the interior of the whole Centre have been donated by BAI.

April-12

World Health Days

BAI in association with Apollo Bramwell Hospital (ABH) and with Bramer Bank offered free screenings camps in five regions of the island.

June-12

Le Salon de la Santé 2012

BAI provided guidance to the visitors on Health Insurance, counseling on health eating habits and on prevention against non-transmissible diseases.

9.2 Education

Table CSR INITIATIVES – EDUCATION

EDUCATION

Date

Event Name

November-10

End of Year Party & Inauguration of Science Classroom at R C Nuckchady School

BAI funded gifts and lunch for all the students and personnel for the inauguration of the completely renovated Science Classroom.

April-10

Renewal of MOU with MITD

The renewed MOU caters for another batch of 1,800 students who have not completed their Certificate of Primary Education by funding all required stationery and equipment to complete the course.

October-10

Distribution of CPE Kit at R C Nuckchady School

BAI donated stationery kits and CPE revision manuals to 31 students.

March-11

Promoting Education at the Gandhian Basic School

Donation of 110 School Kits and a cheque of Rs. 20,000.00 to the Gandhian Basic School (GBS).

July-11

Handing over of computer to La Cigogne Pre-Primary School

BAI donated pre-primary and primary schools with up-to-date generation computers for the pupils of La Cigogne Pre-primary School of Mon Gout.

July-11

La Journée Récréative of Terre d’Espoir Mahebourg.

BAI was among the partners who funded this activity. Workshops were organized for children of different vulnerable groups of the region, followed by a défilé of St John Ambulance First Aiders of Mahebourg.

February-11

Symbolic ceremony with MITD

MITD and BAI handed over training materials to NTC Foundation trainees.

January-12

Donation of library books and a laptop to Lady Sushil Ramgoolam SSS

For a cost of MUR 15,000, BAI CSR has done a donation of reading and reference books for the school library to support the sudents in the completion of their school syllabus.

April-12

Ste Therese de L’Enfant Jesus School Riviere Coco, Rodrigues

BAI sponsored the pupils of standard IV and V for their Annual Educational Tour.

9.3 Women’s Empowerment

Table CSR INITIATIVES – WOMEN’s EMPOWERMENT

WOMEN’s EMPOWERMENT

Date

Event Name

May-10

Launch of Women Leadership Programme

April-10

Renewal of Memorandum of Understanding with WIN

The Memorandum of Understanding (MOU) with Women in Networking (WIN) has been renewed and training will be provided in the basics of Management and Communication to 50 women.

December-10

Shelter for Women and Children in Distress

BAI CSR organized an event at the BAI centre, whereby lunch was offered to the children and staffs of the shelter.

February-11

Signing of MOU with National Women Entrepreneur Council (NWEC)

Signature of MOU with NWEC and objectives ares, to train around 1,000 women entrepreneurs in the various management programmes,the creation of 30 women-owned enterprises during the term of the present MOU and to help to increase the turnover of existing women-owned businesses

September-11

National Women Entrepreneur Council Training Workshop in Business French

With the support of the MOU, signed with the National Women Entrepreneur Council (NWEC), BAI sponsored a workshop on the training of 1,000 women in entrepreneurial skills to allow them to manage their own business.

April-11

The Launching of NWEC Training Programme 2011

9.3 Other CSR activities – Year 2013

Table OTHER CSR ACTIVITIES – YEAR 2013

OTHER CSR ACTIVITIES

Date

Event Name

April-13

BAI supports five NGOs

Together with by British American Investment group, BAI gave its support to five NGOs engaged in areas such as child protection, health or fight against drug addiction.

April-13

Donation to flood victims of 30-March-2013

BAI, supported by British American Investment, made a contribution of MUR5million (to be carried out through Courts).

Analysis and Conclusions

As the data instrument (questionnaire) was divided into four sections (the respondents’ profile, employees’ opinion on CSR at BAI, Benefits of CSR, Management’s responsibility), our findings are presented with reference to these sections of the questionnaire.The results are presented by the use an amalgamation of summary statistics in terms of frequencies and percentages, trend and chi-square tests.

10.1 Response Ratio

The survey was sent to 115 respondents at BAI centre (head office) and in different branches around the island. In total I went through three rounds of reminders. In spite of this, only 83 have been returned back and analyzed. Therefore I have received 73% questionnaires back, which are 83 completed surveys to analyze.

10.2 Respondent profile

Table 1 presents background characteristics of 39 men of 18 to more than 55 years and 44 women of the same age range. The share of the respondents of the survey according to age shows that in general there is a more or less similar pattern for males and females.For the age structure, we notice that he proportion of respondents in each age group at start increase, and then start to declines with increasing age for both sex. We can also point out that more than 50% of the respondents are in the age group of 25-39 years that is 23 men and 21 women.It is noted that most of the respondents have 5-10 years experience in the company, representing a percentage of 27% of the respondents that is 22 respondents, followed by 3 new recruits with less than I year at BAI, 11 respondents employed between 2 to 5 years, 18 respondents in the range of 10 to 15 years, 15 respondents between 15 to 20 years and 14 employees for more than 20 years.It can also be seen that most of the questionnaires have been distributed to the operational level that is the low-level of management representing a percentage of 49%, followed by 33% from the middle-level management and 18% from the upper-level of management.This might be explained to the fact that the lower-level management at BAI was more accessible to participate to the survey compared to middle-level management and least accessible was the upper-level of management. Another reason that might explain this disproportion between the respondents from low we levels to higher levels is the fact that most of the questionnaires sent to higher management has not been returned back.Table DEMOGRAPHIC PROFILE OF RESPONDENTSSex?TotalMaleFemaleAge Group?Between 18-24 years257Between 25 to 39 years232144Between 40-54 years111627>55 years325

Total394483For how long have you been working at BAI Co (Mtius) Ltd?<1 year1232 – 5 years38115 10 years11112210 15 years1081815 20 years8715> 20 years6814

Total394483Within which level of management are you classified?Low-Level Management172441Middle-Level Management151227Upper-Level Management7815

Total394483

10.3 Familiarity to CSR practices

One of the core questions of the study is to determine the familiarity of the respondents with the term CSR.The responses to familiarity of CSR shows that 68 respondents which represents 82% are familiar to CSR practices of the organization and the remaining of the respondents, that is 15, representing 18% are not familiar with the concept of CSR. We thus can deduce that responses from the 82% are more reliable to analyze as they are familiar to CSR.Figure Familiarity to CSR practicesdemonstrates that 82% of respondents are familiar to CSR, which is a significant percentage, meaning that BAI keep inform its employees about CSR activities of the company.Figure Familiarity to CSR practicesTable Familiarity to CSR across Level of Management

Familiarity to CSR practices – Management Level?

Cross Tabulation

Within which level of management are you classified?Total

Low-Level ManagementMiddle-Level ManagementUpper-Level ManagementAre you familiar with CSR practices in your organization?

Count4000040Expected Count13.013.38.84.940.0YesCount025291569Expected Count22.423.015.18.469.0NoCount0140014Expected Count4.64.73.11.714.0TotalCount40412715123Expected Count40.041.027.015.0123.0The familiarity with the term CSR is more common middle-level management and upper-level management, than in low-level management whereby out of the respondents who answer “NO”, all are found to be in the low-level management. The chi-square test revealed that the difference is significant.Those of the highest level are more familiar to the CSR initiatives. This might be for the reason that the Upper Level Management has a more significant sense of ownership to CSR practices they are those who are responsible for making the most critical decision including CSR decisions. There is also the fact that people at the top levels are in general more committed to the company.

10.4 Pillars of CSR

In line with literature on the topic, (Eufin.org, 2009), who defined CSR as a concept companies take themselves to reflect social and environmental concerns within their activities and in their relations with the diverse corporate stakeholders, the next question of the survey was related to the different stakeholders.Figure Pillars of CSR demonstrates that as per the BAI employees who participated into the survey, 35% respondents consider that the pillar of CSR is giving back to society, helping people. Followed by 19% respondents conspiring treating employees well, and giving equal opportunity to be the pillar of CSR, 17% selected Customer oriented, cares about product impact on customers, 9% chooses Environmentally responsible, green, 8% chooses Gives back/concerns self with local community and 7% chooses Self-regulation, accountability.Figure Pillars of CSR

10.5 Impact of CSR on stakeholders

Figure – Impact of CSR on the different stakeholdersIn line with current literature (Freeman & Velamuri, 2006) and questionnaires findings, CSR was viewed to be implemented through stakeholder theory and the 3 main stakeholders include; the employees, the customers and the community.

10.5.1 Impact of CSR on employees

Employees as a unit of analysis have received limited attention in past CSR literatureAccording to Figure – Impact of CSR on the different stakeholders, it can be noted that CSR have positive impact on employees, as respondents specified that CSR are ‘very beneficial’ and ‘somewhat beneficial’, with a percentage of 35% and 32% respectively.Even if there are 12% employees who think that CSR has a neutral impact on employees and 3% that CSR is not beneficial at all, the results are irrespective of whether CSR is clear or not for the respondents because according to the chi-square results there was no significant relationship between how clear is the tem CSR and respondents’ opinion on the benefits of CSR activities.Therefore it can be deduced that employees have a positive perception of CSR.These figures also demonstrate that BAI has in one way or another incorporate internal CSR policy in the management culture of the company since 35% respondents think that CSR is very beneficial to them and 32% think that CSR is somewhat beneficial to them.Figure Employees benefits from CSRNowadays, many businesses have realized that people are their most valuable assets and Figure Employees benefits from CSR shows that does have a positive impact on employees. The survey inquired in details about the benefits that BAI obtains in engaging in CSR. Benefits in term of higher staff morale, is the most important as per our respondents, with 51%, followed by 27% for Increase in productively and 23% Increase in performance. We can therefore conclude that CSR has a positive impact on employees and therefore human resource should be considered as an investment for the company instead of a cost.Figure Employees RetentionDespite that we have previously seen that CSR has various positive impact on employees in terms of increase in staff morals, increase in productivity and performance, our survey also revealed that on the other hand CSR is not as important as a basic job satisfaction. Our study has revealed that if the employees do not feel happy and do not have enough trust into the company, even the incorporation of strong CSR initiatives is less likely to cause an improved in the retention rate than any other initiative that is directly related to improvement in job satisfaction such as job enrichment as well as autonomy.This is supported by the data collected with 35% answers ‘No’ to the question shown in Figure Employees Retention, 23% answers ‘Yes’ and 25% answers ‘Neutral’.

10.5.2 Impact of CSR on Customers

As per Figure – Impact of CSR on the different stakeholders, a high percentage of respondents (40%) considered that CSR is very beneficial to customers, 28% considered that CSR is somewhat beneficial, and on the other side 10% think CSR has a neutral impact on customer and 4% think that CSR is not beneficial for customers.These positive figures have a direct relationship with previous discussions on employees’ benefits from CSR. As it has been shown in Figure 4, CSR brings an increase in staff morals, increase in performance and increase in productivity meaning that there is an increase in quantity and an improvement in quality, and better quality will therefore means that better products and services offered to customers.Therefore depending on elasticity of demand, the fact that customers are more likely willing to buy products with firms that are socially responsible and the improved in quality of products and service can lead to an increase in demand. These also support Baron’s (2001) original approach that “a practice labeled as socially responsible… increases the demand for the firm’s product. This strategic CSR is simply a profit-maximizing strategy motivated by self-interest…”

10.5.3 Impact of CSR on Community

Firms interact within their community in various manners and for different motives and this interaction represent an essential part of social integration and conduct. This interaction was in the past mostly restricted to the local environment, which consist of the people representing the employees and with the persons to whom their goods and services are sold.However, with reference to Chapter 9: Corporate Profile BAI Co (Mtius) Ltd, the interaction with the community has been extended to Health, Education, Empowerment of women, Eradication of poverty, Protection of environment, Child protection and fight against drug addiction which are detailed in Table , Table CSR INITIATIVES – EDUCATION and Table CSR INITIATIVES – WOMEN’s EMPOWERMENT.As per Figure 3, 48% of the respondents selected that CSR is very beneficial for the community, 22% think CSR is somewhat beneficial for the community in contrast to 12% CSR has a neutral impact on the community and only 1% respondents specified that CSR is not beneficial for the community.We therefore may deduce that BAI is playing a vital role in the economic and social community in which it operates as in reference with Table , Table CSR INITIATIVES – EDUCATION and Table CSR INITIATIVES – WOMEN’s EMPOWERMENT, BAI is contributing substantially in the improvement of quality of life and standard of living of the community.

10.6 Impact of CSR on corporate strategy