Assignment On CSR Practices of Dhaka Bank Limited SIM: 510 (Strategic Formulation & Implementation)
Submitted to: Dr. M A Mannan Professor
Submitted by: Md. Shahidul Islam ID: 210
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MBA, 13 Batch Department of Management Studies University of Dhaka
September 11, 2012
A company has a responsibility to make a profit and grow the business- in capitalistic market, economies; management fiduciary duty to create value for shareholders is not a matter for serious debates. Precisely, a company and its personnel also have a duty to obey the law and play by the rules of fair competition. A company has to perform some social responsibilities for the betterment of society which in turn indirectly enhance company’s reputation and market expansion.
Business Ethics: In simple words, ethics means the sense of understanding of a person what is right and wrong. But business ethics has special meaning. Business ethics is the application of ethical principles and standards to business behavior. Business ethics is also known as corporate ethics. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organization. The range and quantity of business ethical issues reflects the interaction of profitmaximizing behavior with non-economic concerns. Interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia.
Corporate Social Responsibility (CSR) At present time, business ethics is popularly known as Corporate Social Responsibilities (CSR). It carries broader range of business and ethical dimensions. Corporate social responsibility is the behavior and action by a company in relation to society. In other words, an organization has to function ethically and maintain, develop social welfare activities. CSR means being a good citizen in the community. CSR is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as that of the local community and society at large.
Strategy and Corporate Social Responsibility (CSR) The corporate executives should balance the interests of all stakeholders — shareholders, employees, customers, suppliers, creditors, investors and society at large. To be a market leader, a company should have a sound corporate strategy which embraces social responsibility aspects precisely. The notion of CSR is to perform company’s duty to operate in honorable manner, providing good working atmosphere for internal customers, to be a good steward of the environment and work for better the quality life in the local communities.
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Business leaders want their companies to be regarded as exemplary corporate citizens through doing business ethically and meeting the social a ctivities carefully. A company’s social responsibility strategy should cover the following elements. These are as follows-
Actions to ensure ethical strategy
Actions to support charitable causes, particiapate in community service
Actions to provide workforce diversity
Actions to protect the environment
CSR strategy
Actions to enhance employee well-being
Figure: Elements of CSR strategy of a company Source: Ronald P. Hill (2003), Corporate Social Responsibility: An Examination of Individual Firm Behavior, p-348
1. Actions to ensure ethical strategy:
Company efforts to employ an ethical strategy and observe ethical principles in operating the business. A sincere commitment to observe ethical principles is essential because unethical strategies and conduct are incompatible with good corporate citizenship and socially responsible actions.
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2. Actions to support charitable causes, participate in community service:
There are many companies who are making charitable contributions, donating money and the time of company personnel to community service endeavors, supporting various worthy organizational causes and reaching out to make a difference in the lives of the disadvantaged. There are some companies in Bangladesh such as Beximco Ltd, Monno Ceramics ltd, DBBL etc.
3. Actions to protect the environment:
Social responsibility as it applies to environmental protection means doing more than what is legally required. From a social responsibility perspective, companies have an obligation to be steward of the environment. This also means using the best science and technology to achieve environmental standards.
4. Actions to enhance employee well-being:
A company should take action to create a work environment that enhances the quality of life for employees and makes the company a great place to work. Many companies have included engaging job assignments, career development programs and monitoring, rapid career advancement, appealing compensation incentives, adding decision making authority, flexible work schedule etc.
5. Actions to provide workforce diversity:
Actions to build a workforce that is diverse with respect to gender, race, national origin, and perhaps other aspects that different people bring to the workplace. Most companies in USA have established workforce diversity programs. Multinationals companies are particularly inclined to make workforce diversity a visible strategic component.
Benefits of Corporate Socially-Responsibility (CSR)
It is the ethical thing to do
It improves the firm’ public image
It is necessary in order to avoid excessive regulation
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Socially responsible actions can be profitable
Improved social environment will be beneficial to the firm
It will be attractive to some investors
It can increase employee motivation
It helps to corrects social problems caused by business
It aids the attraction and retention of staff
It attracts green and ethical investment
It attracts ethically conscious customers
It can lead to a reduction in costs through re-cycling
It differentiates the firm from its competitor and can be a source of c ompetitive advantage
It can lead to increased profitability in the long run
CSR Practices of Dhaka Bank Ltd The Dhaka Bank Limited was started it journey in 1995 with a vision to be the premier financial institution in the country providing high quality products and services backed by latest technology and a team of highly motivated personnel to deliver Excellence in Banking. It has a sound CSR policy relation with the corporate strategy. DBL as a responsible corporate citizen is fully aware of its responsibilities about how its operational activities impact its stakeholders, the economy, the society, its staff and the environment.
DBL involves itself in charity, social welfare and other benevolent activities towards the promotion of the objective of its foundation which would act as a catalyst in creating awareness on development issues and as a facilitator for building bridges with the common goal of sustainable development of the society, providing direct assistance to various development projects and people. Dhaka Bank Ltd. has formed a five member CSR committee headed by the Managing Director to oversee the overall activities and management of the CSR fund of the bank. Dhaka Bank Foundation, established in 2002 as a non-profitable, non-governmental organization, is solely devoted to the cause of charity, social welfare and other benevolent activities towards the promotion of the objective of the foundation.
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Dhaka Bank has taken the decision to provide 2% of the pre-tax profit each year as its CSR activities. CSR activities of DBL are as follows-
Health
Donation of passenger lifts and two haemodialysis machines to BIRDEM Hospital and Tk. 1.2 million per year from 2006 for supporting operating costs.
Donation of Tk. 10 million to Centre for Women and Child Health Hospital for setting up pathological laboratory.
Setting up of a 10-bed ward at the proposed Ahsania Mission Cancer and General Hospital, sponsoring Society for the Welfare of Autistic Children (SWAC).
Donating to Bangladesh Eye Hospital, Sponsorship for Shield Trust.
Disaster relief
Among Dhaka Bank’s contribution as corporate social responsibility, a few initiatives are donation to Asiatic Society of Dhaka.
Relief operation for flood victims at a cost of Tk. 5.0 million.
The bank distributed 10 kg rice, 1 kg pulse, and 1 kg salt to each of the 10,000 distressed families of Araihazar, Sirajdikhan and Belkuchi.
Social welfare
Renovation of the auditorium of Dhaka Reporters Unity.
Sponsoring of Anti Drug Debate Festival, Distribution of winter cloths by the emplo yees of the bank.
Sponsoring of Bangladesh Under-19 cricket team.
Awareness creation for Road Safety, Blood Donation, Eye Donation, Prevention of AIDS.
Provided financial assistance for Educational Development Trust of Scholastica to support and nurture academically gifted students.
Sponsorship for BADC School.
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Environment
Sponsored the city beautification program initiated by Dhaka City Corporation by refurbishing
Dhaka Bank Fountain in front of Ministry of Foreign Affairs and Dhaka Bank Park in front of
Dhaka Bank Head Office, beautification at Jashimuddin Crossing at Uttara costing 1.5 m, and also in front of Dhaka Bank Head Office costing 1.2 m.
Business Ethics is the criteria of measuring judgment of what company should do or not. It is guideline of taking proper decisions and implementation. Corporate Social Responsibility (CSR) plays very significant role of Expansion Company’s growth involving local community and providing the quality of life of its stakeholders. Every company whether it is big or small should have CSR strategy compatible with its corporate strategy.
It seems to be unnecessary
expenditure to general people but it has great impact of company’s long term profit and reputation. It varies from company to company, region to region, country to country. DBL has a special CSR committee who continuously oversee the activities and monitoring its proper utilization of fund. So it can be said that CSR is a part and parcel of corporate strategy. It is an indirect investment of company.
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References
1. Arthur A. Thompson, A.J Strickland, J. E. Gamble and Arun K. Jain (2010), th
Crafting and Executing Strategy: The Quest for Competitive Advantage (16 Edition), Tata McGraw Hill, New Delhi, P:323-351
2. Cooter, R. and T. Ulen (1988). Law and Economics. New York, Harper Collins. 3. Desai, M. (1991). Issues concerning setting up of social work specializations in India. International Social Work, 34, 83 – 95 4. Enderle, Georges (1999). International Business Ethics. University of Notre Dame Press. p. 1. 5. F. Milton (1970). "The Social Responsibility of Business is to Increase Its Profits". The New York Times Magazine. Retrieved March 11, 2001 6. Macmillan, F. (2006). Public interest and the public domain in an era of corporate dominance, pp. 46 – 69 7. Smith, N. H. (1997). Strong Hermeneutics: Contingency and Moral Identity. London: Routledge. 8. Storey, D.J. (1985). "THE PROBLEMS FACING NEW FIRMS [1]". Journal of Management Studies 22 (3): 327. 9. Watson T.J (2003). 'Ethical Choice in Managerial Work: The Scope for Managerial Choices in an Ethically Irrational World', Human Relations, 56(2): 167 – 85 10. www.tutor2.net/ CSR/corporate-social-responsibility-.htm 11. www.dhakabank.com/ CSR/about_mission.php.htm 12. www.reportbd.com/ CSR/Dutch, city.htm 13. www.wikipedia.en/ CSR/Modern_Business_Ethics.htm
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