OPPI CorporateSocialResponsibility

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ORGANISATION OF PHARMACEUTICAL PRODUCERS OF INDIA

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Tel : 91+22+2491 8123, 2491 2486, 5662 7007 Fax : 91+22+2491 5168
e-mail : indiaoppi@vsnl.com Website : www.indiaoppi.com
PREFACE
Way back in 1970, the legendary Economist, Milton Friedman wrote in an article in New York Times
arguing that the only social responsibility of business is to increase its profits. Since 1970 we have come a long
way and today the concept of 'Triple bottom line' (financial, social and environmental or to put it simply, people,
planet and profit) is beginning to gain ground. As the Indian economy begins to globalise and we enter the so
called knowledge century, this concept will have to take strong roots and become an integral part of running the
business. Organisation of Pharmaceutical Producers of India (OPPI) recently scanned about two dozen annual
reports of large listed pharmaceutical corporations and without fail each corporation highlighted its Corporate
Social Responsibility (CSR) or Corporate Philanthropy which ranged from donations, to charity, to cause related
marketing. Unfortunately, most programmes were diffused barring few exceptions and targeted towards
goodwill among employees, customers and the community in which they live and had little to do with social
investment as a business strategy. Time has now come to move one notch beyond the conventional meaning
and use it as a strategic and competitive advantage.
Management thinkers like Michael Porter and C.K. Prahlad have articulated this concept very lucidly in
their recent articles. Emerging economies like India and China have often faced the dilemma of balancing
economic growth with social objectives and often there is a feeling that these two goals are intrinsically
conflicting. In reality, and in the long term, social and economic goals are not conflicting but integrally
connected. Realising the importance of this subject, OPPI in collaboration with SPJIMR (S.P. Jain Institute of
Management & Research) has completed a research project to study how the Pharmaceutical Industry in India,
whose primary mission is to improve the quality of life of its customers through its products and services, can
leverage this strength for sustainable business growth. We thank all the OPPI Members who contributed
generously to this study.
We congratulate SPJIMR for completing this Research Project on “Corporate Social Responsibility
of Pharmaceutical Companies in India” and hope that our members as well as Industry in general gain
adequate insights in honing their business strategies for making CSR an effective tool.
Dr. Shailesh Ayyangar Dr. Ajit Dangi

Chairman Director General
OPPI Human Resource Development (HRD) Committee OPPI Copyright © 2005 Organisation of Pharmaceutical Producers of India
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means
24th September, 2005, Mumbai electronic, mechanical, photocopying, recording, or otherwise - without written permission of OPPI
i ii
S.P. Jain Institute of Management & Research
Munshi Nagar Tel : +91+22+2623 0396/2401/7454
Dadabhai Road, Andheri (W) Fax : +91-22-2623 7042
Mumbai 400 058, India Website : www.spjimr.org
ACKNOWLEDGEMENTS
S.P. Jain Institute of Management & Research (SPJIMR) is thankful to the Organisation of Pharmaceutical
Producers of India (OPPI) for giving us the opportunity to work on this project.
SPJIMR also thanks all the OPPI member companies who have taken time out to respond to our
questionnaires that were used for the survey.
We appreciate the efforts taken by Dr. Ajit Dangi and Mr. Homi Bhabha from OPPI for their inputs and
suggestions.
SPJIMR's Dr. M.L.Shrikant - Hon. Dean, Prof. S.D. Kshirsagar - Faculty, Prof. Mayank Shah - Ex-Faculty,
Mr. Kapil Marwaha - Consulting Faculty and Mr. Vishal Parekh - Research Associate have been
instrumental in completion of this report.
iii
FOREWORD
potential of CSR as a vehicle for strengthening the competitive
Business has emerged as an exceedingly powerful player in an advantage of a firm. C.K. Prahlad and Allen Hammond too
increasingly interdependent world. It is hence not surprising that have highlighted the way forward for business by ”Serving the
Corporate Social Responsibility (CSR) reflects and respects the poor, profitably”. CSR has traveled such a long way from
complex interdependency between business practice and wider Corporate Philanthropy to strengthening the competitive
societal concerns. How to manage this interdependency to advantage of a firm.
mutual benefit indeed for sustainability is a moot point. In other
words, corporate commitment to the triple bottom line (people,
Point of Departure What should be the thrust and scope of Corporate Social
planet, profit) is now one of the strategic tasks of corporate
Objective of this study Responsibility in the Indian context is a matter of serious
managers - study and adoption of concern. It is from this perspective that we believe the
road map for CSR.
Organisation of Pharmaceutical Producers of India (OPPI),
CSR in Indian context Notwithstanding the fact of commitment of Indian industry to commissioned S P Jain Institute of Management and Research
Unresolved issues of poverty, corporate philanthropy, most Indian companies may not have to undertake a preliminary study on CSR as practiced among its
unemployment, illiteracy latched on to the importance of adopting CSR as an element of members from which to draw a possible road map for adoption.
threat to social stability.
business sustainability.
Limitations : As the study was launched, it unfolded two limitations. Firstly,

ITC's e-Chaupal Scope of CSR in the West encompasses environmental 뜠Only OPPI members as the starting base for investigations constituted only OPPI
The e-Chaupal initiative of ITC an degradation, social concerns (such as child labour or affirmative starting base for study. members and not the overall pharmaceutical industry.
apt illustration of leveraging CSR in actions) and issues of transparency. Indian scene demands 뜠Limited response from
Additionally, there was limited response on the part of the OPPI
company's strategy. OPPI members.
additional and urgent attention vis-à-vis issues of poverty, member firms who were approached for data collection.
unemployment, illiteracy, to ensure stable society a prerequisite
for business growth.
Hence, re-orientation As a result and with a view to ensure that this study serves a
Business being part of and not distinct from society needs to useful purpose, SPJIMR re-oriented the approach of this study
Towards historical review of CSR and
contribute towards the resolution of these problems of human Towards potential for adoption towards deriving understanding/clarity on historical
life in the Indian society. of CSR in formulating corporate
review/evolution review of CSR in the specific context of Indian
business strategy.
firms to suggest alternative approaches for decision making
The eChaupal initiative of ITC is an apt illustration leveraging and review at individual firm levels potential for adoption of
CSR in the company's growth strategy. CSR in formulating corporate business strategy
CSR today In reality, scope of CSR has continued to evolve from Four parts of study Section A analyses the social initiatives of pharmaceutical
CSR scope from philanthropy to philanthropy - regulatory confirmation - enlightened leadership A. Analysis of responses from companies in India based on responses to our survey and
strengthening the competitive strategic scope and more recently to addressing CSR interests OPPI members. assessing impact of their CSR activities. OPPI members engage
advantage of a firm. B. Presentation of various
for strengthening the competitive advantage of a firm. perspectives on CSR. in a wide array of activities with the focus on areas related to
C. Study of practices of various their business, viz. health care, reaching out to many
organisations. beneficiaries.
Michael Porter of Harvard Business School has advocated the D. Outlining the way forward.
v vi
Section B presents various perspectives for making the social Introduction
initiatives more effective by dovetailing it with business strategy.
It focuses on three types of social responsibilities of business, viz.
Research
economic performance, removal of adverse social impact of
Organisation of Pharmaceutical Producers of India ['OPPI'] has engaged S.P. Jain Institute of Management
economic performance and facilitating progressive social
& Research's Center for Development of Corporate Citizenship to conduct research in the area of Corporate
development and elaborating collaborative approach between
Social Responsibility ('CSR') of its member Pharmaceutical companies.
business and society within the framework of Michael Porter.
Objective of Research
Section C illustrates the said perspectives with reference to
The objectives of the said research are:
practices of the pharmaceutical industry and practices of
various pharmaceutical and non-pharmaceutical companies / 1. To survey the CSR practices of OPPI member companies; and
organisations. 2. To examine perspectives of CSR appropriate to the needs of business and society and recommend how
CSR practices of OPPI member companies can be made more effective.
Section D outlines the way forward based on discussion of the

three types of social responsibilities of business. Research Report
This document is the research report. Based on a survey of CSR practices of OPPI member companies and
The study undertaken by SPJIMR offers a perspective on what analysis of diverse aspects including well-established writings of management thinkers and several instances, the
Our hope …
Pharmaceutical industry efforts industry can do (to get a hold on the health issue for instance) report examines the perspectives of CSR appropriate to the realities and needs of business and of society and
will have to be directed at a more and what an individual company can do. recommends how CSR practices can be made more effective.
evolved adoption of CSR at both
industry and corporate level.
We believe if Pharma industry decides to enhance its CSR This research report is organized as follows :
effectiveness, efforts will have to be strengthened at two Section Title and Content
separate centers : at the industry level, i.e. e.g. OPPI and at A 'Survey of CSR practices' presents an understanding of the CSR practices of the
individual firm level. respondent companies.
B 'Perspectives for making CSR practices more effective'- presents various perspectives
Influencing practice is one of the driving principles of all related to CSR in order to show how CSR practices can be made more effective.
endeavors at S.P. Jain Institute of Management and Research. C 'Illustrations'- illustrates perspectives presented in Section B.
Our efforts in researching this study will be considered well D 'Conclusions and Way Forward'- presents conclusions and outlines the way forward
rewarded if it induces useful, interactive discussions leading to a (based on all the preceding sections) to make CSR practices more effective.
more evolved adoption of CSR at both industry and corporate
Appendices Presents further notes and illustrations referred to in the report.
level.
Dr. M.L.Shrikant
Hon. Dean
S.P. Jain Institute of Management & Research
vii ix
INDEX
1. Executive Summary 1
2. Section A: Survey of CSR practices 9
3. Section B: Perspectives for making CSR

practices more effective 47
4. Section C: Illustrations 93
5. Section D: Conclusions and way forward 119
6. Appendices 125
xi
Executive Summary Executive Summary
Based on the responses to our survey of CSR practices of OPPI member companies we found that companies The purpose of business is 'economic performance'. Business needs to achieve a certain level of profit to
engage in a wide array of activities with the highest focus on areas related to the business of the companies i.e. facilitate 'economic performance' which is expressed in the need to create and sustain competitive
healthcare. These activities reach out to a wide array of constituents of the marginalized sections, particularly advantage.
women, children and poor. The companies themselves generally carry out such activities though many
companies also partner with specialist agencies to carry out CSR programs or outsource CSR programs to The social relation of a business manifests itself in the following three responsibilities towards society: the
specialist agencies. first is 'economic performance'; the second is to remove/reduce any adverse impact on society that arises
in the course of its 'economic performance' and the ultimate social responsibility of a business is to
We noted that less than half of the companies have some kind of a specific organisational structure / department catalyze progressive social development that will focus on social growth as well as address social
- be it project coordinators, public relations department or trusts - to handle their CSR activities and that various problems. Benefits to society apart, such development is a source of significant economic opportunity
levels of management are involved in implementing CSR activities with the Board and senior management for business (beyond 'image building') as it could greatly improve the company's competitive potential or
being specifically involved in about half the cases. address the key constraints that limit productivity, innovation, growth and competitiveness.
While all companies, without exception, allocate financial resources towards CSR activities, some companies A company discharges its first social responsibility of 'economic performance' when it achieves a positive
also devote material / organisational resources towards CSR activities. At the same time 'Cheque writing' CSR EVA (Economic Value Added) for a positive EVA contributes to the economic growth of society and a
seems to be prevalent with quite a few companies. negative EVA contributes to the economic decline of society.
Though most of the companies carry out an assessment of the impact their CSR activities have majority of the A company can discharge its second social responsibility of 'removing/reducing its adverse social
companies do not prepare social / qualitative reports. impacts' by dropping the activity that causes it or minimizing the impact or making the removal of the
impact into a profitable business opportunity or working at getting the right regulation enacted so that
At the end of the day, the companies' views on the effectiveness of their CSR programs and beneficiaries differed the cost to be borne at removing such impact is not a competitive disadvantage to the company relative
- one-third of the companies believe their CSR programs have been completely effective with respect to benefits to other competitors.
to the companies. Half of the companies believe that their CSR programs have been partially effective with
respect to benefits to the company while, one company expressed dissatisfaction on such effectiveness of its CSR A company should discharge its ultimate social responsibility of catalyzing progressive social
program. development by tightly aligning its economic and social goals. Such alignment enables a company
to achieve significantly higher results with respect to both these goals compared to the
The CSR programs of close to half of the companies have received some kind of recognition by way of awards. results obtainable if these goals were pursued separately.
Notably, while majority of the companies have some kind of plan, though not detailed, in geographical terms, Companies could tightly align their economic and social goals by focusing on developing their core
relating to the size and growth of their CSR programs for the next 5 years, less than half of the companies have elements of competitive context that are embedded in the social environment.
some sort of financial / organisational plans relating to the size and growth of their CSR programs for the next 5
years. From the perspective of business, this significantly enhances its competitive advantage by upgrading its
level of talent, knowledge, infrastructure, by ushering innovation, by expanding its markets and by
In order to appreciate how CSR practices can be made more effective, it is necessary to examine various making its internal and external working environment conducive to productivity.
perspectives relating to business, its social relation and CSR:
From the perspective of society, this catalyses progressive social development by ushering social growth
and addressing social needs increasing the pool of talent, knowledge, infrastructure, satisfying needs of
weaker sections, rural prosperity, strengthening of individual well being and values.
3 4
Executive Summary Executive Summary
The detailed methodology for such alignment is explained in the main section. The various perspective mentioned above have been illustrated in this report with reference to indicated
developments; practices of the pharmaceutical industry; and practices of various pharmaceutical and non-
Developing strategies for tightly aligning economic and social goals, and implementing them, should necessarily pharmaceutical companies / organisations. In addition this report also contains illustrations of some approaches
be led by the CEO/Board of Directors of the company. Such strategies would need to be customized to the size, suggested for pharmaceutical companies.
strength and overall strategy of the company, as 'one size does not fit all'.
An important roadmap for making CSR practice of pharmaceutical companies in India more effective can be
It is possible that some social issues cannot be resolved by linking them to a company's competitive context but gleamed from the above, viz.:
which nonetheless need to be resolved since a sick society and a healthy business are not compatible.
Companies could address such issues through 'philanthropy' carried out in an effective manner. Fundamentally, companies should focus on discharging all three responsibilities to society i.e. achieving
'economic performance', minimizing adverse social impact and catalyzing social development.
In the interests of society and business itself, business should stay within three limits while catalyzing progressive
social development. Firstly, it should refrain from taking up any activity that jeopardizes its basic function of
For achieving a higher result as regards both its goals economic and social, companies should closely
'economic performance' by eroding the minimum profitability required by the risks of the business and its
align their social and economic goals. This can be achieved by focusing on the four elements of
commitments to the future. Secondly, it should refrain from taking up tasks for which it lacks competence; else it
corporate competitive context that lie embedded in the social framework, i.e.:
would only do harm to society and to itself. Thirdly, business must refrain from taking up any activity in areas in
which does not and should not have the authority implied in the responsibility for those areas.
Develop factors through direct investment (e.g. R&D) and / or through influencing / participating in
community investment e.g. involvement with foundations / government organisations / industry
Assessment of activities from a CSR perspective provides valuable feedback and facilitates reporting thereof.
associations.
Reporting on activities from a CSR perspective compels a company to assess them in the first place and also
meet the growing expectation that companies should report on their activities from a CSR perspective.
Companies can use Reporting Frameworks to aid the description of their activities encompassing all the three Develop 'demand conditions' by seeking out 'buyers' in rural areas with difficult needs to secure
social responsibilities i.e. 'economic performance', minimizing adverse social impacts and catalyzing social pressure for innovation in cost reduction or different product features and increasing focus on
development. healthcare segments requiring urgent attention.
The report also examines seven myths, which are largely responsible for molding the direction of CSR practices Improve the context for strategy and competition by undertaking in-house programs / steps to
as they stand today; viz. 'responsibility' is the same as providing succor; corporates are responsible for the promote employee values and well being, and incorporate these in routine functioning and
common social good; CSR is equal to ethics, philanthropy and public relations/image building; there is no clear influencing removal of unfair trade practices.
linkage between CSR and financial success; instead CSR prevents 'maximization of profits', the prime objective
of a company; self-interest is bad; society is distinct from a business enterprise; and the 'Stakeholder' Theory.
Contribute to developing related / supporting industries e.g. Clinical Trials industry and Hospital
These myths are seriously flawed and are expected to decline over time.
industry.
Both, Peter F. Drucker and A.P.J. Abdul Kalam convey that the Next Society of the world will be a
Social goals that cannot be aligned with economic goals nonetheless need to be addressed and these
Knowledge Society. Social change will be at the core of this Knowledge Society. Employment
can be addressed through 'philanthropy' carried out in an effective manner.
generation, high productivity, high industrial growth, empowerment of weaker sections, networked and
transparent society and rural prosperity will be both the cause and result of this Knowledge Society. It
follows that to navigate effectively in this Knowledge Society it will be imperative for companies to
pursue CSR that tightly aligns their economic and social goals.
5 6
Executive Summary
In terms of organisational effectiveness, companies should increase the involvement of the Board and
senior management in the implementation of CSR programs and strengthen CSR assessment and
reporting initiatives.
In terms of approaches, companies should explore avenues to partner with other companies in carrying
out CSR programs and stay within the above mentioned limits while catalyzing social development and
look beyond the seven myths relating to CSR.
Finally, companies must strengthen planning for CSR programs for the future.
All this can be achieved by the companies by pursuing innovation in a regular and systematic manner.
SURVEY OF CSR PRACTICES

OF PHARMACEUTICAL
COMPANIES IN INDIA
7
Section A : Survey of CSR Practices Section A : Survey of CSR Practices
1. Executive Summary
INDEX
S.P. Jain Institute of Management and Research ('SPJIMR') designed and sent questionnaires on
Corporate Social Responsibility ('CSR') practices to OPPI member companies. Based on the responses
1. Executive Summary 13
received, SPJIMR has analyzed the CSR practices of the respondent companies. A summary of these
2. Background 17 findings is presented below. This section presents further details including an analysis of CSR practices
3. Classification 18 with respect to size, age and ownership pattern of the respondents.
4. Survey findings 19
4.1. CSR activities 19 1.1. CSR activities
4.1.1. Nature of CSR activities undertaken 19
4.1.2. Geographical impact 22 · Companies engage in a wide array of activities with the highest focus on areas related to the business
of the companies i.e. healthcare.
4.2. Beneficiaries of CSR activities 23
4.3. Approach to implementing CSR activities 25
· Efforts are focused in and around the areas where the company has a presence.
4.3.1. Vehicle for implementing CSR activities 25
4.3.2. Nature of organisations supported 27
4.4. Investment in CSR 28
1.2. Beneficiaries
4.4.1. Organisational involvement in commencement
& running of the CSR activities 28
· CSR activities of the companies reach out to a wide array of constituents of the marginalized
4.4.2. Involvement of financial and other resources 31 sections, particularly women, children and poor besides patients.
4.5. Impact Assessment 35
4.5.1. Companies assessing impact 35 1.3. Approach to implementing CSR activities
4.5.2. Qualitative assessment 37
4.5.3. Quantitative assessment 38 · While most of the companies carry out CSR programs themselves, many companies also partner
4.5.4. Reporting 39 with specialist agencies to carry out CSR programs or outsource CSR programs to specialist
agencies. About one-fourth of the companies do not monitor the activities of the specialist agencies
4.6. Effectiveness of CSR 40
to which CSR activities are outsourced.
4.6.1. Benefits to the companies 40
4.6.2. Benefits to the beneficiaries 41
· NGOs receive the highest support followed by company's own projects. Government programs
4.6.3. Level of respect earned 42 receive the least support from the CSR activities of the companies.
4.6.4. Awards received 43
4.7. Future plans 44 1.4. Investment in CSR
4.8. Other Observations 45
Corporate investment in CSR activities takes the form of organisational involvement in commencement
and running of CSR activities and / or the form of involvement of financial and other resources.
11 13
Executive Summary Section A : Survey of CSR Practices
Organisational involvement Qualitative assessment
Less than half of the companies have some kind of a specific organisational structure / department - Most of the companies assess the impact of their CSR activities and monitor program
be it project coordinators, public relations department or trusts - to handle their CSR activities. implementation by way of discussions with partners.
On obtaining further information it was found that of those companies which do not have a specific Half of the companies attain direct feedback from beneficiaries.
structure to handle their CSR activities, about half appeared to entrust their CSR activities to their
Human Resource division. Quantitative assessment
The Board has initiated CSR activities in less than half of the companies. About one-third of the companies track the number of beneficiaries impacted by their CSR activities
and the amount spent thereon.
Various levels of management are involved in implementing CSR activities, with the Board and
senior management being specifically involved in about half the cases. Reporting
Financial and other resource involvement Majority of the companies do not prepare social / qualitative reports.
While all companies, without exception, allocate financial resources towards CSR activities, some
companies also devote material / organisational resources towards CSR activities.
1.6. Effectiveness of CSR
'Cheque writing' CSR seems to be prevalent with quite a few companies.

One-third of the companies believe their CSR programs have been completely effective with respect
to benefits to the companies. Half of the companies believe that their CSR programs have been
Allocation of resources is primarily based on the needs of the organisation supported. partially effective with respect to benefits to the company. However, one company expressed
dissatisfaction on such effectiveness of its CSR program.
Majority of the companies allocate resources towards CSR activities on an annual basis.
Companies have similar views as above as regards the extent to which their CSR programs have
1.5. Impact Assessment been effective with respect to the beneficiaries.
Most of the companies carry out an assessment of the impact their CSR activities have. Companies believe that they earn a fairly high level of respect from various stakeholders, in
particular, from employees and locality.
Most of the companies that carry out an impact assessment do so in qualitative terms; about half of
these do so in quantitative terms as well. The CSR programs of close to half of the companies have received some kind of recognition by way
of awards.
14 15
1.7. Future plans 2. Background
Majority of the companies have some kind of plan, though not detailed, in geographical terms, With a view to understand the Corporate Social Responsibility ('CSR') practices of pharmaceutical
relating to the size and growth of their CSR programs for the next 5 years. companies in India, S.P. Jain Institute of Management and Research ('SPJIMR') designed and sent
questionnaires to OPPI member companies. The following companies responded to the questionnaires:
Less than half of the companies have some sort of financial / organisational plans relating to the size · Abbott India Ltd.
and growth of their CSR programs for the next 5 years. · Associated Capsules Group
· AstraZeneca Pharma India Ltd.
· Baxter India Pvt. Ltd.
1.8. Other observations · Becton Dickinson India Pvt. Ltd.
· Dabur Pharma
Majority of the respondents who believe that CSR enhanced the competitiveness of their company · Eli Lilly and Co. (India) Pvt. Ltd.
largely relate competitiveness with 'image building'. · Fulford (India) Ltd.
· Galderma India Pvt. Ltd.
Some of the respondents also state that they do not expect any benefits as they have carried out CSR
· GlaxoSmithKline Consumer Healthcare Ltd.
activities with non-profit / 'philanthropic' motive.
· GlaxoSmithKline Pharmaceuticals Ltd.
· Johnson & Johnson - Pharma division
No company partnered with any other pharmaceutical company to carry out any CSR program.
· Lupin Pharmaceuticals Ltd.
· Novartis India Ltd.
· Organon (India) Ltd.
· Pfizer Ltd.
· Procter & Gamble Hygiene and Health Care Ltd.
· Ranbaxy
· Raptakos, Brett & Co. Ltd.
· RPG Life Sciences Ltd.
Based on these responses, we have analyzed the CSR practices of these companies and present the
findings below*.
* We have relied upon the responses and have not performed an independent verification of the same
16 17
3. Classification 4. Survey findings
The survey findings are analyzed with the help of the tabulations in the ensuing paragraphs. For such
purpose, the following classifications have been adopted: 4.1. CSR activities
Size 4.1.1. Nature of CSR activities undertaken
Classification Basis No. of companies With a view to understand the nature of activities the respondents engaged in, each respondent was
Small Companies Turnover less than Rs.500 crores 13 asked to select from a menu of various CSR activities those areas where the respondent focused its CSR
Large Companies Turnover greater than Rs.500 crores 7 programs. In case the respondent carried out CSR activities other than those listed in the menu, the
respondent was provided the option of selecting 'Others' and providing a brief description of the activity.
Age
Based on these responses, we found that the companies focus their CSR activities mainly in the
following areas:
Classification Basis No. of companies
New Companies Less than 10 years since inception 4
Old Companies 10 years or more since inception 16
Continued on following page
Ownership
Classification Basis No. of companies

MNC Part of a foreign group 14
Indian Companies Companies of Indian origin 6
18 19
Section A : Survey of CSR Practices
20
Observations 4.1.2. Geographical impact
Overall With a view to gauging the geographical impact of the respondents' CSR activities, each respondent was
asked to identify the geographical areas to which their CSR activities extended to.
Efforts are focused more on areas related to the business of the companies i.e. healthcare. On
obtaining further information it was observed that in quite a few cases efforts are also focused on Based on these responses, we found that the CSR activities of the companies extend to the following
disease prevention. geographical regions :
Specific
Large and old companies are engaged in a wider array of CSR activities compared to small and new
companies which are primarily focused on provision of medical facilities.
CSR programs of new companies do not extend support to family planning programs.
Conservation of the environment receives a low focus in the CSR programs of all companies except
large companies. MNC's and small companies, in particular, devote minimal resources to
conservation of the environment.
Observations
Overall
· While efforts are focused in and around the areas where the company has a presence quite a few
companies extend their CSR activities to other parts of the country.
Specific
· New companies and MNC's tend to focus their CSR activities in the area where the company has a
presence.
· The CSR programs of large companies, old companies and Indian companies are spread somewhat
evenly amongst locations in / around business and across the country.
21 22
4.2. Beneficiaries of CSR activities Observations
Category of beneficiaries Overall
With a view to understand the nature of beneficiaries of the respondents' CSR activities, each The CSR activities of the companies reach out to a wide array of constituents of the marginalized
respondent was asked to select from a menu of various categories of beneficiaries, those beneficiaries sections particularly women, children and poor. Another major category of beneficiaries is
who were impacted by the respondent's CSR programs. In case the respondent's CSR programs patients this is in line with the fact that healthcare is the major area of focus of CSR activities, as
impacted other categories of beneficiaries, the respondent was provided the option of selecting 'Others' observed in paragraph 4.1.1.
and providing the relevant information.
Specific
Based on these responses, we found that majority of the beneficiaries of the CSR activities of the
companies are as follows :
All the large companies have programs benefiting women and children.
This space is intentionally left blank
23 24
4.3. Approach to implementing CSR activities Observations
4.3.1. Vehicle for implementing CSR activities Overall
With a view to understand the medium employed by the respondents for implementing CSR activities, While most of the companies carry out CSR programs themselves, many companies also partner
each respondent was asked whether it carried out CSR programs by itself, / partnered with specialist with specialist agencies to carry out CSR programs or outsource CSR programs to specialist
agencies or whether it outsourced the same to specialist agencies. Where the respondent outsourced the agencies. About one-fourth of the companies do not monitor the activities of the specialist agencies
CSR programs to specialist agencies, it was asked whether the programs were monitored or not. to which CSR activities are outsourced.
Based on these responses, we found that the companies employ the following modes for carrying out Specific
their CSR programs:
Compared to smaller companies, a significantly higher proportion of larger companies partner with
specialist agencies to carry out CSR programs or outsource CSR programs (which are monitored) to
specialist agencies.
A significant proportion of new companies do not monitor the specialist agencies they use as a
vehicle for CSR activities. While Indian companies and large companies avoid such an approach.
* This is notably higher than the percentage (15%) of companies from across industries that were
found, in a 2003 survey on CSR conducted by IndianNGOs.com, to work directly (or through their
own foundations) on their own CSR programs instead of partnering with NGO's. Understandably,
with healthcare being a major area of CSR, pharmaceutical companies are themselves able to focus
on healthcare unlike a non-pharmaceutical (non-healthcare) company.
25 26
4.3.2. Nature of organisations supported 4.4. Investment in CSR
With a view to understand the nature of organisations / programs supported by the respondents, each Corporate investment in CSR activities takes various forms, such as :
respondent was asked whether it aided NGOs, government projects or undertook its own projects. In organisational involvement in commencement and running of CSR activities. (see paragraphs
case the respondent supported any other organisations / programs, the respondent was provided the 4.4.1.1. to 4.4.1.3. below)
option of selecting 'Other' and providing the relevant information.
Involvement of financial and other resources. (see paragraphs 4.4.2.1. to 4.4.2.4. below)
Based on these responses, we found that the nature of organisations supported by companies' CSR
4.4.1. Organisational involvement in commencement and running of CSR activities
activities are as follows:
4.4.1.1. Organisational Structure
With a view to understand the organisational involvement in commencement and running of CSR
activities, each respondent was first asked whether or not it had a specific structure / department to
handle its CSR activities.
Based on these responses, we found that the following companies had / did not have a specific structure /
department for CSR activities:
Observations
Overall
NGOs receive the highest support followed by company's own projects. Government programs
receive the least support from the CSR activities of the companies. Observations
Overall
Specific Less than half of the companies have some kind of a specific organisational structure / department -
be it project coordinators, public relations department or trusts - to handle their CSR activities.
All new companies and most MNC's and small companies support NGOs. On obtaining further information it was found that of those companies which do not have a specific
Most large companies focus on their own projects while a lesser proportion, though still a majority, structure to handle their CSR activities, about half appeared to entrust their CSR activities to their
support NGO's. Human Resource division.
27 28
4.4.1.2. Commencement of CSR 4.4.1.3. Implementation of CSR activities
Further, each respondent was also asked about the level of management that was involved in
Each respondent was then asked about the level of management that was involved in commencement implementation of CSR activities / programs.
of CSR activities.
Based on these responses, we found that the level of management involved in implementation of CSR
activities is as follows:
Based on these responses, we found that the level of management involved in initiating CSR activities is
as follows :
Observations
Overall
Observations Various levels of management are involved in implementing CSR activities, with the Board and
senior management being specifically involved in about half the cases.
Overall Specific
Specific involvement of Board / Senior management in implementation of CSR activities is higher in

The Board has initiated CSR activities in less than half of the companies. the case of large companies, old companies and Indian companies.
Specific
In case of new companies, the Board was not involved in implementing CSR activities.
On one hand, in most large companies the Board was involved in initiating CSR activities, while on
the other hand, in the case of new companies it played no such role.
29 30
Section A : Survey of CSR Practices
4.4.2. Involvement of financial and other resources
Except one1, none of the companies have indicated the amounts, either in rupee terms or in terms of
percentage of net profits, spent on CSR activities. Hence it is not possible to assess the weightage that is
given to CSR in quantitative terms.
4.4.2.1. Resource investment in CSR activities
With a view to understand the pattern of resource investment in CSR activities, each respondent was
asked to identify the nature of resources committed to CSR activities.
Based on these responses, we found that the resource investment in CSR activities is as follows:
Note: Vertical percentages may aggregate to more than 100% because more than one parameter applies to a respondent(s)
Observations
Overall
While all companies, without exception, allocate financial resources towards CSR activities, some
companies also devote material / organisational resources towards CSR activities.
Specific
Along with financial resources, most large companies and Indian companies also devote material /
organisational resources towards CSR activities.
1
The one company (Size-'large'; Age-'old'; Ownership-'MNC') that did provide a quantitative indication, spent 0.4% of its net profit on
CSR activities
31
* This is notably higher than the percentage (19%) of companies from across industries that were 4.4.2.3. Basis for allocating resources
found, in a 2003 survey on the state of CSR done under the auspices of Partners-In-Change, to
provide physical / material resources as a part of their CSR initiatives. Understandably
With a view to understand the basis for allocating resources, each respondent was first asked to state
pharmaceutical companies are able to cause a higher CSR impact by allocating their own physical /
whether allocations to their CSR activities were fixed or variable.
material resources i.e. medicines.
In cases where respondents allocated resources on a variable basis, the respondents were further asked
4.4.2.2. Financial resources whether the criteria for variable allocation depends on the needs of the organisation supported, the
performance of the organisation supported or according to the earnings of the company.
The following companies allocate only financial resources towards their CSR activities :
Based on these responses, we found that the respondents allocated resources on the following basis:
Observations
Overall
'Cheque writing' CSR seems to be prevalent with quite a few companies.
Specific
Majority of the small companies and quite a few new companies and MNCs engaged in 'cheque
writing' CSR.
Observations
Overall
· Allocation of resources is primarily based on the needs of the organisation supported.

· Very few companies vary the allocation of resources according to the earnings of the company.
32 33
4.4.2.4. Frequency of allocating resources 4.5. Impact Assessment
The respondents were then asked about the frequency with which they allocate resources. Here, each 4.5.1. Companies assessing impact
respondent was asked to select whether they allocated resources annually, periodically or whether
resources were allocated as and when the need arose.
With a view to understand the CSR assessment practices of the respondents, each respondent was asked
whether it carried out an impact assessment of its CSR activities. Where the respondent did carry out an
Based on these responses, we found that the frequency with which the respondent's resources are impact assessment, it was further asked whether it assessed the impact of its CSR activities qualitatively
allocated to CSR activities is as follows: and / or quantitatively.
Based on these responses, we found that the companies assess the impact of their CSR activities as
follows:
Observations
Overall
Majority of the companies allocate resources towards CSR activities on an annual basis.
Specific
Most of the large companies, new companies and MNC's allocate resources towards CSR activities
on an annual basis.
While many of the Indian companies prefer to allocate resources periodically, none of the new
companies or MNC's do such periodic allocation.
34 35
Observations 4.5.2. Types of Qualitative assessment
Overall Further, with a view to understand the different types of qualitative assessments carried out by the
respondents, each respondent was asked to select from a menu of various types of qualitative
assessments those types of assessments which the respondent undertook.
Most of the companies carry out an assessment of the impact their CSR activities have.
Based on these responses, we found that the companies assess the impact of their CSR activities
Most of the companies that carry out an impact assessment do so in qualitative terms; about half of
qualitatively in the following manner :
these do so in quantitative terms as well.
Specific
All the large companies carry out an impact assessment of their CSR activities as compared to a
majority of the small companies that do so.
* This is notably higher than the percentage (44%) of companies from across industries that were
found, in a 2003 survey on CSR conducted by IndianNGOs.com, to have mechanisms to monitor
CSR programs.

Observations
Overall
Most of the companies assess the impact of their CSR activities and monitor program
implementation by way of discussions with partners.
Specific
All new companies assess the impact of their CSR activities and monitor program implementation
by way of discussions with partners.
While a lesser proportion of companies attain direct feedback from beneficiaries, majority of the
large companies, old companies and Indian companies do so.
36 37
4.5.3. Quantitative assessment 4.5.4. Reporting
Further, with a view to gauge the proportion of respondents that assessed their activities from a CSR Next, with a view to gauge the proportion of respondents that reported on the CSR perspectives of their
perspective in quantitative terms, each respondent was asked whether or not it tracked the number of activities, each respondent was asked whether or not it did undertake such reporting.
beneficiaries it supported.
Based on these responses, we found that the companies undertake reporting as follows :
Based on these responses, we found that the following companies quantitatively assess the impact of
their CSR activties :
Observations
Observations Overall
Overall
· Majority of the total number of respondents do not prepare social / qualitative reports.
About one-third of the companies track the number of beneficiaries impacted by their CSR activities
and the amount spent thereon.
Specific
This space is intentionally left blank · Majority of the large companies, new companies and Indian companies prepare some form of social
/ qualitative reports.
38 39
4.6. Effectiveness of CSR been completely effective with respect to benefits to the companies, none of the new companies
believe that their CSR programs have been effective accordingly.
4.6.1. Benefits to the companies

Majority of the small companies, new companies and MNCs believe that their CSR programs have
been partially effective with respect to benefits to the company.
With a view to understand the perception of the respondents on the benefits they obtained from their
CSR activities, each respondent was asked to indicate the extent to which the benefits from their CSR
activities met their expectations. One company expressed dissatisfaction on the effectiveness of its CSR program with respect to
benefits to the company.
Based on these responses, we found that the companies perceive the effectiveness of their CSR activities
as follows : 4.6.2. Benefits to the beneficiaries
With a view to understand the perception of the respondents on the benefits to their beneficiaries from
their CSR activities, each respondent was asked to indicate the extent to which these benefits met their
expectations.
Based on these responses, we found that the companies perceive the effectiveness of their CSR activities
as follows :
Observations
Overall
One-third of the companies believe their CSR programs have been completely effective with respect
to benefits to the companies.
Half of the companies believe that their CSR programs have been partially effective with respect to Observations
benefits to the company.
Companies have similar views as above (see 4.6.1) as regards the extent to which their CSR
programs have been effective with respect to the beneficiaries.
Specific
While majority of the large companies and Indian companies believe that their CSR programs have
40 41
4.6.3. Level of respect earned 4.6.4. Awards received
With a view to understand the company's perception as to the level of respect earned by it due to being With a view to gauge the proportion of respondents whose CSR programs had received some kind of
engaged in CSR activities, each respondent was asked to indicate the level of respect they felt their CSR recognition, the respondents were asked to indicate whether or not they had received any awards for the
activities earned amongst various stakeholders CSR programs.
Based on these responses, we found that the companies perceive the level of respect earned by it due to Based on these responses, we found that the following companies had received some kind of
their CSR programs from various stakeholders as follows : recognition / award for its CSR activities :
Very High High Average Low

Level of respect
earned from No. % No. % No. % No. %
Employees 6 30 10 50 2 10 0 0
Locality 6 30 4 20 5 25 0 0
Market 3 15 4 20 6 30 0 0
Industry 3 15 2 10 7 35 0 0
Governement 4 20 3 15 6 30 1 5
Society 6 30 3 15 5 25 1 5
Note: Horizontal percentages may aggregate to less than 100%

because a respondent (s) has / have not provided an answer
Observations
Observations
Overall
Overall
The CSR programs of close to half of the companies have received some kind of recognition by way
· Companies believe that they earn a fairly high level of respect from various stakeholders, in of awards.
particular, from employees and locality.
Specific
Most of the large companies and half of the Indian companies have received some award as
recognition of their CSR activities.
42 43
4.7. Future plans 4.8. Other Observations
With a view to understand whether the respondents had drawn up any specific future plans for their CSR Majority of the respondents who believed that CSR enhanced the competitiveness of their company
programs they were asked to identify whether the same was in geographical / financial / organisational largely related competitiveness with 'image building'. The comments in most of such cases were
terms and briefly describe the same. provided by the public relations / human resources personnel.
Based on these responses, we found that the proportion of companies who have charted out specific Some of the respondents also stated that they do not expect any benefits as they had carried out
plans for their CSR programs in terms of size and growth for the next five years are as follows : CSR activities with non-profit / 'philanthropic' motive.
No company partnered with any other pharmaceutical company to carry out any CSR program.
A description of various social initiatives undertaken by different

pharmaceutical companies in India is contained in Appendices F & G.
Observations
Overall
Majority of the companies have some kind of plan, though not detailed, in geographical terms,
relating to the size and growth of their CSR programs for the next 5 years.
Less than half of the companies have some sort of financial / organisational plans relating to the size
and growth of their CSR programs for the next 5 years.
44 45
PERSPECTIVES FOR
MAKING CSR PRACTICES
MORE EFFECTIVE
Section B : Perspectives for making CSR practice more effective
1. CSR - business and its social relation.
While several and diverse views exist today on the meaning of CSR, and these are dealt with in
paragraph 6 below, it is well accepted that all said and done, CSR is essentially about business and its
INDEX social relation. Therefore, this section first analyzes, in fundamental terms, the relevant anatomy of
business and links it to an analysis of its social relation. Such an approach is also necessitated by the fact
that most CSR literature has a primary focus on social impact and the focus on business itself tends to
remain hazy. However, to gain a proper perspective of CSR, both these aspects deserve equal focus.
1. CSR- business and its social relation 51
2. Business 52
The purpose of a business 52
Needs of a business 53
3. Social relation of a business 54 This space is intentionally left blank
Social responsibilities - What and Why 56
Discharging social responsibilities 59
effectively - How
4. Limits of responsibilities of business for 75
catalyzing progressive social development
5. Assessment and Reporting of activities from a CSR perspective 78
6. The past and current landscape of CSR 82
7. The seven myths relating to CSR 84
8. The future scenario 90
49 51
Section B : Perspectives for making CSR practice more effective Section B : Perspectives for making CSR practice more effective
2. Business The purpose of 'economic performance' ultimately translates into one task for business: the creation of a
customer2. This is because a customer can only be created by providing value to the customer, which
implies, among others, the efficient use of resources in producing such value. In contrast, a non-business
SUB - SECTION SUMMARY
institution, for example, the defense sector, does not have 'economic performance' as its basic purpose.
Its basic purpose is to provide defense services where economics is a restraint and not the rationale and it
The purpose of business is 'economic performance' which ultimately translates into the task of creating a
does not seek to 'create a customer' who directly pays for the services.
customer.
From the perspective of business, 'economic performance' is reflected in the Economic Value Added
Business needs to achieve a certain level of profit to facilitate 'economic performance' which is expressed
('EVA' - the excess of net profit over the cost of capital) for EVA shows how efficiently (or otherwise) the
in the need to create and sustain competitive advantage.
business has utilized the resources of society that are at its disposal.
SUB - SECTION
2.2. Needs of a business
As mentioned in paragraph 1 above it is relevant to put into perspective the relevant anatomy (i.e. 2
A business needs a minimum level of profit/EVA to facilitate growing 'economic performance' and to
purpose and needs) of business. This is done below in fundamental terms:
cover the risks attached to such performance. Profit is, in fact, both, a need and a result of 'economic
performance'.
2.1. The purpose of business
In an environment of competition, such need is expressed in the need to create and sustain competitive
1
We live in a pluralist society of institutions , that is, a society made up of different institutions such as the advantage, i.e. the ability to provide goods/services either at a lower cost than competitors or those that
defense sector, the business sector, the education sector, the healthcare sector and so on. Each such have different features from those of competitors.
institution is an organ of society and has a specific and important purpose.
Analogous to the 'vyaisyas' of India's ancient social system is the business sector of today, the organ of This space is intentionally left blank
economic growth, whose basic purpose is 'economic performance'. 'Economic performance' means
efficient utilization of resources to produce economic goods/services that satisfy social needs. It also
implies that the business benefits itself in this process.
'Economic performance' results in addition of value to both the society as a whole and the particular
business too. 'Economic performance' adds value to society by ensuring utilization of resources in an
increasingly efficient manner to provide goods/services that increasingly satisfy needs of people who
choose to pay the price for them. In return, business directly receives economic value from society in
recognition of such performance (i.e. profits) that enables it to continue its 'economic performance'. The
result is overall economic growth of society.
1 2
'Management: Tasks, Responsibilities, Practices' by Peter F Drucker The myth of 'maximization of profit' is discussed in paragraph 7.4
52 53
3. Social relation of a business A company should discharge its ultimate social responsibility of catalyzing progressive social
development by tightly aligning its economic and social goals. Such alignment enables a
SUB-SECTION SUMMARY company to achieve significantly higher results with respect to both these goals
compared to the results obtainable if these goals were pursued separately.
· The social relation of a business manifests itself in the following three responsibilities towards society:
Methodology to tightly align corporate economic and social goals:
· Business being the organ of economic growth, its first social responsibility is 'economic
performance' i.e. the efficient utilization of resources to produce economic goods and services Companies could tightly align their economic and social goals by focusing on developing their
that satisfy social needs. It also implies that business benefits itself in this process. core elements of competitive context that are embedded in the social environment.
· The second social responsibility of a business is to remove/reduce any adverse impact on society From the perspective of business, this significantly enhances its competitive advantage by
that arises in the course of its 'economic performance'. upgrading its level of talent, knowledge, infrastructure, by ushering innovation, by expanding its
markets and by making its internal and external working environment conducive to
productivity.
· The ultimate social responsibility of a business is to catalyze progressive social development that
will focus on social growth as well as address social problems. Benefits to society apart, such
development is a source of significant economic opportunity for business (beyond image From the perspective of society, this catalyses progressive social development by ushering social
building) as it could greatly improve the company's competitive potential or address the key growth and addressing social needs increasing the pool of talent, knowledge, infrastructure,
constraints that limit productivity, innovation, growth and competitiveness. This has been satisfying needs of weaker sections, rural prosperity, strengthening of individual well being and
emphasized by pre-eminent management thinkers: Peter F. Drucker, Michael E. Porter and C.K. values.
Prahlad.
The detailed methodology for such alignment is explained in the main section.
· Discharging social responsibilities effectively How

Developing strategies for tightly aligning economic and social goals, and implementing them,
All the three social responsibilities should be discharged by companies : should necessarily be led by the CEO/Board of Directors of the company. Such strategies would
need to be customized to the size, strength and overall strategy of the company, as 'one size does
not fit all'.
· A company discharges its first social responsibility of 'economic performance' when it achieves a
positive EVA (Economic Value Added) a positive EVA contributes to the economic growth of
society and a negative EVA contributes to the economic decline of society. It is possible that some social issues cannot be resolved by linking them to a company's
competitive context but which nonetheless need to be resolved since a sick society and a healthy
business are not compatible. Companies could address such issues through 'philanthropy'
· A company can discharge its second social responsibility of 'removing/reducing its adverse social
carried out in an effective manner.
impacts' by dropping the activity that causes it or minimizing the impact or making the removal
of the impact into a profitable business opportunity or working at getting the right regulation
enacted so that the cost to be borne at removing such impact is not a competitive disadvantage
to the company relative to other competitors.
54 55
SUB - SECTION 3.1.2. The second social responsibility of business: removing its adverse social impacts
Business, being an organ of society, is inextricably related to society. A key factor in any successful What is a 'social impact'?
relationship is the proper discharge of responsibilities. For business, the key factor is, therefore, the
proper discharging of its responsibilities to society (and implicitly to itself) i.e. its social responsibilities. In the process of 'economic performance', business is bound to have social consequences that are
incidental to such performance. These are social impacts. These could be internal, such as on
3.1. Social responsibilities What and Why. employees or external such as on the community, the environment, etc.
The following are the social responsibilities of business3 : Why should social impacts be removed?
3.1.1. The first social responsibility of business: 'economic performance' To the extent such impacts are adverse, whether intended or not, they have to be reduced/eliminated, by
business. This is the second responsibility of business to society it is also a responsibility of business to
itself because as history demonstrates, mismanagement of impacts can severely harm business and
Given that business is the organ of economic growth whose purpose is 'economic performance' as
hence impair its purpose of 'economic performance'.
explained in paragraph 2 above, its first responsibility to society, and to itself, is 'economic performance.'
How should a business deal with impacts?

Business' performance of its specific mission is also society's first need and interest. Society does not
stand to gain but to lose if the performance capacity of business in its own specific task is diminished or
impaired. Performance of its function is business' first social responsibility. Unless it discharges such This is explained in paragraph 3.2.2.
performance responsibly, it cannot discharge anything else. A bankrupt business is not a desirable
employer and is unlikely to be a good neighbor in the community. 3.1.3. The ultimate social responsibility of business: catalyzing progressive social development
Viewed accordingly, a company manufacturing textiles, for instance, is accountable for efficient What is progressive social development?
utilization of resources to provide textiles having lower costs or better features to customers. In this
process, the company adds value to itself as well in the form of profits/EVA, which enable it to continue
Progressive social development is an all-encompassing approach to development that not only
its purpose of 'economic performance'.
addresses social problems but also focuses on social growth as a necessary condition for social
development.
Notably, a company that has a negative EVA cannot be said to have achieved 'economic performance'
for unless it makes a profit that is greater than its cost of capital, it returns less to the society than it
Why should businesses catalyze progressive social development?
devours in resources. In other words, it does not create wealth; it destroys it.
4
Business should catalyze progressive social development because their doing so provides much needed
Appendix A shows how EVA is computed.
benefit to both, society and business. Progressive social development addresses social weaknesses and
3
harnesses social strengths leading to all round social development.
Based on Peter F. Drucker's book 'Management: Tasks, Responsibilities, Practices'. Peter Drucker is rated as 'the pre-eminent
management thinker of our time'. 4
Also see views in this respect of late Mr. Rohington Aga, founder of Thermax Ltd. accessible at A key theme that ran through the presentations of some CEO's at the 2004 World Economic Forum summit at Davos was the role
http://www.thermaxindia.com/news/new08d.htm#8 of the corporation in social development.
56 57
The benefits to business are as follows : 3.2. Discharging social responsibilities effectively How.
1. Significant business opportunities (beyond 'image building'). It is pertinent to note that all the three social responsibilities discussed above should be discharged by
companies. The following paragraphs discuss how each responsibility may be discharged and provide a
detailed methodology (in paragraph 3.2.3.) based on an alignment of a company's economic and social
As asserts Peter F. Drucker, “social problems are major sources of opportunity. For it is the
context.
function of business and to a lesser degree of the other main institutions to satisfy a social need
and at the same time serve their institution, by making resolution of a social problem into a
business opportunity. The success of some of the most successful businesses is largely the result 3.2.1. Discharging the first social responsibility 'economic performance'
of such social innovation.” Drucker validates his assertions with examples, two of which are
given in Paragraph 2.1. of Section C; these are noteworthy even in the Indian context. A company that achieves a positive EVA (and not just a profit position) contributes to the economic
growth of society; it erodes society's wealth when its EVA is negative.
5 6
Michael E. Porter demonstrates the manner in which a company's social investments can
enhance its core competitive context. He presents a structured approach to such strategy, which A company can, therefore, discharge its first responsibility to society, and implicitly to itself, by striving to
enables companies to achieve significantly greater results with respect to both their goals achieve a positive EVA (over a period representing its business cycle). This is not the same as focusing on
economic as well as social. Porter's model provides a sound road map and is discussed in detail 'maximization of profits' but is about achieving a certain level of profit which enables a company to fulfill
in paragraph 3.2.3.1. below. its need / purpose of 'economic performance'.
7
C.K. Prahlad emphasizes the above in his famous paper: “What works: serving the poor, Appendix A shows how EVA is computed.
profitably” and his recent book 'The Fortune at the Bottom of the Pyramid: Eradicating Poverty
Through Profits', with several live instances.
Please refer to Section C (Paragraph 3) for illustrations.
2. Protecting 'economic performance'.

3.2.2. Discharging the second social responsibility 'removing adverse social impacts'
Not every social problem/issue can be addressed by making it into a business opportunity. But at
A company can discharge its second social responsibility by undertaking the following steps8:
the same time, a healthy business and a sick/weak society are hardly compatible. Businesses cannot
prosper on a sustained basis in a society that is plagued by dysfunctions/weaknesses simply because
business is part of, and not distinct from, society. Sooner or later, the dysfunctions/weaknesses of · Identification of adverse social impacts
society would spread and reach a level where they jeopardize the 'economic performance' of
business. The first step should be to identify and/or anticipate adverse social impacts objectively and
realistically.
Please refer to Section C (Paragraph 2.2.) for illustrations.
5
Michael E. Porter is Head of Harvard Business School's Institute of Strategy and Competitiveness. · Removing / Reducing adverse social impacts
6
In 'The competitive advantage of nations' by Michael E. Porter and 'The competitive advantage of corporate philanthropy ' by Michael E.
Porter and Mark R. Kramer.
7
C.K. Prahlad is professor of corporate strategy and international business, University of Michigan Business School. 8
'Management: Tasks, Responsibilities, Practices' by Peter F Drucker
58 59
The next step is to work towards removing/reducing the impacts, as follows: It enables a company to achieve significantly greater results as regards both its goals. economic and
social, compared to the results obtainable if these goals were pursued separately9.
Wherever an impact can be eliminated by dropping the activity that causes it, this is therefore the
10
best - indeed the only true good - solution. Consequently, such alignment strengthens a company's competitive advantage on one hand and
11
social investments on the other.
In most cases the activity cannot, however, be eliminated. Hence there is need for systematic
work at eliminating the impact - or at least at minimizing it while maintaining the underlying Such alignment could greatly improve the company's competitive potential or address the key
activity itself. constraints that limit productivity, innovation, growth and competitiveness, well justifying the
investment of resources for such alignment11.
Please refer to Section C (Paragraph 4(i)) for illustrations.

12
At the same time, it can unlock a vastly more powerful way to make the world a better place .
The ideal approach is to make the elimination of impacts into a profitable business opportunity.
In the long run, corporate economic and social goals are not inherently conflicting but integrally
connected. Recognizing this, pre-eminent management thinkers have always encouraged businesses to
Please refer to Section C (Paragraph 4(ii)) for illustrations.
13
pursue strategy that achieves both these goals simultaneously through a collaborative approach .
To make elimination of an impact into a business opportunity should always be attempted. But
it cannot be done in many cases. More often eliminating an impact means increasing the costs.
It therefore becomes a competitive disadvantage unless everybody in the industry accepts the
same rule. And this, in most cases, can be done only by regulation.
This means it becomes incumbent upon the management of businesses to think ahead and work
out the regulation, which is most likely to solve the problem at the minimum cost and with the 9
'The competitive advantage of corporate philanthropy' by Michael E. Porter and Mark R. Kramer appearing in The Harvard Business
greatest benefit to public and business alike. And it is then the job of businesses to work at getting Review, December 2002.
the right regulation enacted. For, to expect that there will be no regulation is willful blindness. So 10
Michael E Porter and Mark R Kramer in “The Competitive Advantage of Corporate philanthropy' appearing in The Harvard Business
is saying “but the public doesn't object.” Sooner or later, as history has repeatedly shown, Review, December 2002.
society will come to exact a high price from those who have not responsibly worked on 11
Social investments tend to weaken in absolute and relative terms over a period of time. For example, corporate philanthropy in the
eliminating the impact. To ignore the problem is to put ego, desire for power, and vanity ahead U.S. is in decline. Charitable contributions by U.S. companies fell 14.5% in real terms in 2001, and over the last 15 years, corporate
giving as a percentage of profits has dropped by 50% (See 'The competitive advantage of corporate philanthropy ' by Michael E. Porter
of the good of the business and of the community. And this is irresponsible. and Mark R. Kramer.). In India, in a 2002 survey conducted under the auspices of IIM-B, it was found that only 35 % of the respondent
Indian companies engaged in 'philanthropy'. Even amongst the bigger Indian companies today, there are some whose spend on
'philanthropy' often forms an infinitesimal percentage of revenue (though it finds a grand mention in their Annual Reports.)
3.2.3. Discharging the ultimate social responsibility: 'catalyzing progressive social development' 12
“Indeed we are learning that the most effective method of addressing many of the world's pressing problems is often to
mobilize the corporate sector in ways that benefit both society and corporates” (See 'The competitive advantage of corporate
philanthropy ' by Michael E. Porter and Mark Kramer.) This theme has been echoed by Paul Martin, a former Canadian finance minister
A company can discharge its ultimate social responsibility by tightly aligning its economic and social and Ernesto Zedillo, a former President of Mexico, in their recommendation of unleashing the business potential of the developing world
for economic and social gains, in their article “The business of fighting poverty” which appeared in The Economic Times of 29th August,
goals. Such alignment has the following important outcome : 2003.
13
The main theme at the 2004 World Economic Forum summit was 'Partnering for security and prosperity' where at a plenary session,
leaders in business, the non-profit sector and academia explored ideas and policies that would help achieve this goal.
60 61
1. Factor conditions (talent, knowledge, infrastructure)

In this context it may be noted that there appears to be good scope for 2. Demand conditions (customers with difficult needs, size of the market)
pharmaceutical companies in India to move towards a tight alignment of their social 3. Context for strategy and rivalry (the manner in which companies are organized/managed including
economic goals given that: attitudes, social/professional norms the and nature of domestic competition)
4. Supplier/related industries.
(i) 'cheque writing' CSR seems to be prevalent with quite a few companies [vide
paragraph 4.4.2.2 of Section A ('Survey of CSR practices')]; These are represented by the following diagram, better known as “Porter's Diamond”:
(ii) allocation of resources by companies to achieve social goals is primarily based

Context for
on the needs of the social organisation supported (instead of allocating
Strategy & Rivarly
resources based on an alignment of social and economic goals) [vide
paragraph 4.4.2.3 of Section A]; and
Factor Demand
Conditions Conditions
(iii) only one-third of the respondent companies believe that their CSR programs
have been completely effective with respect to benefits to companies
themselves [vide paragraph 4.6.1 of Section A] or benefits to the Related and
beneficiaries. [vide paragraph 4.6.2 of Section A] Supporting
Industries
15 16
Porter demonstrates how development of these 'elements' contributes to strengthening of:
· Core competitive advantage of industries/corporates by reducing the cost of activities/output or

The following paragraph provides a detailed methodology for companies to pursue such a collaborative
differentiation (i.e. enabling the performance of activities in a unique way that creates greater buyer
approach.
value in terms of product quality, special features or after sales service); and
3.2.3.1.The Collaborative Approach

· Progressive social development since these elements are embedded and widespread in the social
environment.
Michael E. Porter conducted a four year study of over a of over a hundred industries spread over ten
nations that account for 50% of the total world exports to analyze why nations gain competitive
14
advantages in particular industries . What he found was that companies will not ultimately succeed
unless they base their strategies on improvement and innovation, a willingness to compete, a realistic
understanding of their national 'environment' and actively work to improve such 'environment' and
leverage on it. In this context, he identified the following 'elements' in the social 'environment' which
15
In 'The competitive advantage of nations' by Michael E. Porter and 'The competitive advantage of corporate philanthropy ' by Michael
directly influence competitive advantage: E. Porter and Mark R. Kramer.
16
These principles were endorsed by Y.C. Deweshwar, ITC's chairman, who commented at ITC's A.G.M. in 2003 that Porter's insights
14
“fits the Indian society like a glove.” (See www.itcportal.com).
This study culminated in his celebrated book “The competitive advantage of nations”.
62 63
17
Each 'element' is dealt with below : being pursued in a 'start and stop' pattern. Such investments generally have a medium to long-
term payback yielding high returns.
1. Development of 'Factor conditions':

Factor conditions refer to the state of key inputs to businesses i.e. talent, knowledge, infrastructure, Competitive companies usually have well-developed internal training programs and, compared
necessary to compete in an industry. to their rivals, set aside more than average resources in R & D.
Across Indian industries the awareness of companies in India on the importance of
Well-developed factors promote innovation and sustain higher order competitive advantage in training employees has generally increased. However, the level of investment in R&D
19
domestic and global markets for businesses. They also enhance society's pool of talent/ knowledge/ often remains low .
infrastructure, which is crucial to progressive social development. It is for this reason that successful
companies/industries, across nations, take explicit steps to create factors or ensure that institutions Please refer to Section C (Paragraph 5.1.1.) for illustrations.
were established or influenced to do so instead of merely accessing such factors. In fact, failing to
18
invest in factor creation is recognized as a fatal error in international competition . (ii) Influencing / participating in community investment:
Please refer to Section C (Paragraph 5.1.) for illustrations. Companies can also create factors in a cost-effective way through active involvement in
the efforts of educational/research institutions, government entities and foundations or
In terms of strategy, companies should, therefore : by encouraging such involvement by industry associations. This can take the following
forms:
Assess factor availability

Sponsoring students
At the outset companies should undertake an assessment of the level of such factors available to Interfacing with educational / research institutions
them (i.e., how advanced/unique is the company's talent/ knowledge?). Companies should also Involvement with foundations / government organisations
assess the rate of sustained growth of their talent/ knowledge given that knowledge has to progress Involvement with industry associations
continuously to remain knowledge.
Sponsoring students
Develop factors, through
Companies could sponsor students pursuing higher education who would then serve
(i) Direct Investment with the company.
Companies must invest directly in factor creation through their own training, research and Please refer to Section C (Paragraph 5.1.2.1.) for illustrations.
infrastructure building. Such investment should be sustained over a period of time instead of
19
The Economic Times of India R&D survey of 30 January 2004 shows that considering R&D spending as a percentage of GDP, India still
has a long way to go. While it was 0.843% in'03, for the US and Japan it was 2.8% and 2.9% respectively. Even a small country like Korea
17
Based on the book 'The competitive advantage of nations' by Michael E. Porter and the article 'The competitive advantage of corporate spends 2.9% of its GDP on R&D
philanthropy ' by Michael E. Porter and Mark R. Kramer.
The Economic Times of India R&D survey of 30th January 2004 shows that overall; the R&D expenditure of India Inc. is “a meagre
18
Advanced and specialized factors of production are sine qua nons of competitive advantage. Yet, they are not inherited by a nation 0.33% of its net sales as of FY '03.” Notably, the 2003 DSIR (Department of Scientific and Industrial Research) awards for outstanding in-
but created. While government has a constructive and important role in creating factors, it cannot be left to government alone. house R&D went mostly to small and mid cap companies.
64 65
Interfacing with educational/research institutions 2. Development of 'Demand conditions':
· Companies can establish working relationships with faculty in disciplines of Demand conditions in a nation refer to the size of local demand and more importantly, the
interest to help such faculty understand the needs of industry and advise composition of demand (that is, the demanding or difficult nature of buyer needs).
students accordingly.
· Companies must maintain regular contact with all centers of research that bear Both these aspects (i.e. size and composition) greatly impact a company's competitive
on its activities, through sponsoring visits by faculty to the company's research advantage. Buyers with demanding or difficult needs provide companies with insight into
facilities, creating programs in which company researchers spend time in emerging customer needs and with the pressure required for innovation in cost reduction or in
university/research laboratories and vice versa, and participating in company different product features. Such innovation then creates larger markets, domestically and
sponsorship programs. globally. The composition of home demand is at the root of national advantage, while the size
and pattern of growth of home demand can amplify this advantage by affecting investment
· Companies can fund research by leading institutions through specific research behavior and motivation.
contracts in areas of company's interest. Companies can provide financial
support for research facilities and endowed research positions. Buyers with demanding/difficult needs are often people from the lower income groups or rural
areas. A significant way to ameliorate their difficult conditions is to provide them with
Please refer to Section C (Paragraph 5.1.2.2.) for illustrations. goods/services that meet their demanding/difficult needs.
Involvement with Foundations and Government organisations In the Indian social context, buyers with difficult needs can be found in abundance in the rural
sector.
Companies can also join programs of Foundations and Government organisations to

create factors in a cost-effective way. In terms of strategy companies should, therefore:
Please refer to Section C (Paragraph 5.1.2.3.) for illustrations. (i) Seek out the 'buyers', such as in rural areas, with the most difficult needs such as
maintenance requirements, cost disadvantages, climate, etc. Companies need not
exclusively focus on such buyers but must include such buyers in their overall market
Involvement with industry associations
portfolio.
Companies should encourage industry associations of which they are members to

Please refer to Section C (Paragraph 5.2.1.) for illustrations.
sponsor up gradation of the pool of factors from which industry members, although
rivals, draw from.
(ii) Increase focus on segments requiring urgent attention
Please refer to Section C (Paragraph 5.1.2.4.) for illustrations.

Please refer to Section C (Paragraph 5.2.2.) for illustrations.
66 67
Much of the above has been the theme of the paper in the Indian context, “ What
20
works: serving the poor, profitably ” by noted management thinker C.K. Prahlad (and
even of Prahlad's subsequent talks in India on Indian social and economic growth and his most
recent book 'The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through
Profits'). Prahlad presents, convincingly, the principles stated above, with several live instances.
Undoubtedly, pursuing such strategy is challenging, but as is generally with challenges,

the pay offs can be significant.
3. Context for Strategy and Rivalry:
The third broad determinant of national competitive advantage in an industry is the context in
which companies are organized/managed as well as the nature of domestic rivalry
(competition).
For instance, a company that is organized/managed by people that rank high in ethical/moral
values and productivity usually succeeds through the long run. An environment that promotes
core values and all round well being of employees is conducive to the growth of ethical/moral
values and productivity. This translates into both economic and social gains.
Also, companies can prosper in a sustainable manner if the environment in which they compete
is not marred by corrupt practices. The adverse economic and social impacts of the scourge of
corruption are illustrated in Section C (Paragraph 2.2.).
In terms of strategy companies could, therefore:
· Undertake in-house programs/steps to promote employee values and well being, and
incorporate these in routine functioning.
· Influence removal of unfair trade practices.
Please refer to Section C (Paragraph 5.3.) for illustrations.
Strengthening the internal and external environment accordingly can have the most far-reaching
impact on economic and social development.
20
http://www.digitaldividend.org/pdf/serving_profitably.pdf
68
22
4. Related and Supporting Industries: There is no 'free rider' problem
The fourth broad determinant of national competitive advantage in an industry is the presence Companies should not hesitate to pursue the abovementioned strategies out of fear that other
of related and supporting industries that are competitive. Contributing to the development of companies, especially competitors, may be 'free riders', i.e., share the benefits, or that
such industries strengthens the business 'value system' in which resides the business 'value chain' investment in factor creation may be nullified when employees leave or technology is copied.
and simultaneously deepens social development.
Firstly, the benefits reaped by the companies pursuing the said strategies will remain significant
Please refer to Section C (Paragraph 5.4.) for illustrations. compared to those hoped by any competitor. This is because such companies will focus on
particular needs or locations that may not be of equal importance to competitors. Also,
What ultimately emerges from the discussion so far in this entire section on the social relation of companies that initiate such strategies will build superior reputation/relationships.
business is that business has to think through and manage their social responsibilities not for the
sake of society alone but equally well, for their own sake. Besides, companies that invest in their personnel and have an orientation towards innovation
usually have low turnover of key personnel. Also, regular and rapid technological progress, not
one-shot breakthroughs is the secret to retaining competitive advantage. To believe otherwise is
a sign of a static conception of competition.
3.2.3.2. Some specific points in relation to strategies for aligning economic and social goals.
Cost effective approach

One size does not fit all
Catalyzing progressive social development is ripe for collective action. By involving other
Such strategies should be customized to the particular company's size, strengths and overall
companies who would also gain directly or indirectly from the impact of the social development,
strategy, as 'one size does not fit all'. 32
the overall cost is shared . Further, by involving and leveraging on the competencies of other
developmental organisations, such strategies can become highly cost effective as explained in
Economic and social multiplier paragraph 3.2.3.1.
The basic reason for tight alignment of corporate economic and social goals, which is the theme As noted in paragraph 4.8 of Section A of this report, no company partnered with
of such strategies, is that such alignment achieves significantly greater results in terms of both any other company to carry out any CSR program. Such avenues should be
these goals compared to those obtainable if these goals were pursued separately. It is critical that explored to make CSR programs more cost effective.
this is understood.
Implementation
The acid test
Strategies aligning economic and social goals will have a significant bearing on the strategic
'Image building' is not the consideration. The acid test of such alignment /collaborative strategy context of the business of companies and should hence be driven by the CEO/Board of the
is whether the desired social change is so beneficial to the company that the organisation would particular company and not be delegated to the social development division of the company.
21
pursue the change even if no one ever knew about it . The division could provide inputs as may be necessary.
21 22
'The competitive advantage of corporate philanthropy' by Michael E. Porter and Mark R. Kramer. 'The competitive advantage of corporate philanthropy' by Michael E. Porter and Mark R. Kramer.
69 70
Companies should analyze the areas where their social investments could improve the Overcoming the Social Challenge
company's competitive potential or address the key constraints that limit productivity,
innovation, growth and competitiveness. A company should give special attention to the
The motive of alignment of corporate economic and social goals is easier to explain and
particular constraints that have a disproportionate effect on its strategy relative to competitors;
understand. Advocacy programs including demonstration of benefits will help address
23
improvements in these areas of context will potentially reinforce competitive advantage . challenges.
In this context may be noted that of the surveyed pharmaceutical companies in

The Overall Challenge
India about half specifically involve their Board and senior management in
implementing CSR programs [vide paragraph 4.4.1.3 of Section A ('Survey of
Strategies aligning corporate economic and social goals would not succeed if they were
CSR practices')]. There is hence, scope for increasing the involvement of the
viewed as a tool for exploitation of either society or companies.
Board and senior management of the respondent companies in their CSR
programs.
Overcoming the Overall Challenge
Challenges
Right attitudes of the individuals responsible will help address challenges.
The Corporate Challenge:

Unalignable issues 'Philanthropy'
Taking this new direction requires change in the way companies approach competitive
strategy and their 'philanthropic' programs. Change can be challenging and It is possible that some social issues cannot be resolved by linking them to a company's
uncomfortable: stability is enticing. Again, such strategies require a medium to long- competitive context. And even these issues need to be addressed not only from a social
term perspective whereas generally there is a tendency to take a short-term view on perspective but also in the interests of corporates for; after all, a sick society and a healthy
matters. business are incompatible.
Overcoming the Corporate Challenge In terms of strategy, companies can act to address these issues through what is termed
traditionally as 'philanthropy'. Care should, however, be taken that the philanthropic activities
are carried out in a manner which makes them highly effective.
It is often the leadership that is the driving force to success. Successful leadership sees
matters in the correct perspective and as the record shows, seeks out change focusing
more on long-term approaches. Therefore, leaderships can and will need to overcome The detailed article “Foundations' new agenda: creating value” by Michael E. Porter and Mark R
this challenge. Kramer appearing in the Harvard Business Review of Nov-Dec 1999 provides specific
guidelines on how a higher social value can be achieved for amounts spent on 'philanthropy';
these are summarized as follows:
The Social Challenge
The Social Sector, at times, views corporate social initiatives with cynicism seeing such
initiatives as mere publicity efforts.
23
Michael E. Porter and Mark R. Kramer in “The Competitive Advantage of Corporate philanthropy'
71 72
'Philanthropy' can generate social benefits that go beyond the mere purchasing 3.2.3.3 A note on innovation.
power of the amounts donated. This can be done in four ways. The first two are
relatively well known but are rarely practiced systematically. The last two are far
Central to the strategies suggested to align economic and social goals is the pursuit of innovation.
more powerful but far less common. All four can create value, but there is a clear
Innovation is not just technological invention but is a radically new way to carry out any activity, be it
hierarchy of ascending impact. The four ways are:
marketing, after sales service, training, etc. The suggested strategies can succeed only where an
innovative approach is adopted in their formulation and implementation. Strategies apart, “not to
1. Selecting the best grantees
innovate is the single largest reason for the decline of existing organisations” shares Peter F. Drucker.
Resources can be channeled to their most productive uses within the social sector
by funding beneficiaries that represent urgent or overlooked problems or that are Some companies apply their resources and core competencies to help solve chronic social problems in
the most cost effective. ways that add value to their own businesses. This model is based on the premise that companies tackling
tough social problems learn to innovate, which helps them gain an advantage in new markets. This
In this context it may be noted that the CSR programs of pharmaceutical advantage comes from acquiring knowledge of how these markets operate, developing products that
companies in India reach out to a wide array of the marginalized sections of the the markets demand, and building the necessary relationships to be successful. This is a marked change
society as is evident from paragraph 4.2 of Section A ('Survey of CSR practices') from the past, according to Harvard Business School Professor Rosabeth Moss Kanter:
2. Signaling other Funders

Traditionally, business viewed the social sector as a dumping ground for spare cash, obsolete equipment,
Further social value can be created by educating and attracting other support and tired executives. But today smart companies are approaching it as a learning laboratory…to
groups. develop ideas, serve new markets, and solve long-standing business problems.
In this context it may be noted that quite a few pharmaceutical companies in the The corporate sector in India needs to strengthen its practices in innovation24.
west have successfully attracted other foundations / government organisations to
magnify the impact of their CSR activities as illustrated in sub paragraphs 5.1.2.3.
and 5.2.1. of Section C.
3. Improving the performance of grant recipients Companies in India should now move towards pursuing innovation in a regular and systematic manner.
Still more social value can be created when resources are used to improve the
performance of the grantees.
4. Advancing the state of knowledge and practice
The highest social value is created by funding research and a systematic

progression of projects that produce more effective ways to address social
problems. Following this and being concerned with world hunger in the late 1950s
and early 1960s the Ford and Rockefeller Foundation created research institutions
that developed new strains of wheat and rice that doubled and tripled crop output
per acre.
24
A survey of the World Economic Forum ranked India at the 45th position out of 80 countries in terms of innovative practices
73 74
4. The limits of responsibilities of business for catalyzing progressive social development There are essentially three limits to responsibilities of business for catalyzing progressive social
25
development. These are :
SUB-SECTION SUMMARY
4.1. The Limit of 'economic performance':
In the interests of society and business itself, business should stay within the following three limits while
catalyzing progressive social development: It is inappropriate for business to take up any activity that jeopardizes its basic function of 'economic
performance' by eroding the minimum profitability required by the risks of the business and its
commitments to the future. To be certain, eroding minimum profitability is not the same as eroding
Business should refrain from taking up any activity that jeopardizes its basic function of 'economic
profitability. It is the preservation of the minimum level of required profitability that is crucial. (For a
performance' by eroding the minimum profitability required by the risks of the business and its
further understanding of this, please refer to the discussion on the myth of maximization of profits in
commitments to the future.
paragraph 7.4 below)
Business should refrain from taking up tasks for which it lacks competence; else it would only do
After all, and as stated earlier, society does not stand to gain, but to lose, if the performance capacity of
harm to society and to itself.
business is impaired.
Whosoever assumes responsibility has to be given authority. Therefore, business must refrain from
In fact, the same limitation on social responsibility applies to non-economic institutions. These
taking up any activity in areas in which does not and should not have the authority implied in the
institutions too are the capital assets of society on the performances of which society depends. To
responsibility for those areas.
jeopardize their performance capacity, no matter how noble the motive, is irresponsibility. This, to be
sure, is a very unpopular position to take. It is much more popular to be “progressive”. But managers,
While staying within these limits, business will nonetheless need to think through and offer alternative and especially managers of key institutions of society, are not being paid to be heroes to the popular
approaches, in the interests of society and itself. press. They are being paid for performance and responsibility.
SUB-SECTION
4.2. The Limits of Competence:

The proposition that businesses should address social issues as mentioned in paragraph 3.1.3. would
raise the question that to what extent should business be expected to, and be permitted to, undertake
For a business to take on tasks for which it lacks competence is irresponsible behavior. It can only do
responsibility to tackle a problem that did not arise out of an impact of theirs and which cannot be
harm to society and to itself.
converted into a business opportunity?
A business has to acquire whatever competence is needed to take responsibility for its adverse impacts.
A seemingly simple answer lies in a recent statement of Narayana Murthy, Chairman of Infosys Ltd.,
But in areas of social responsibility other than impacts, right and duty are limited by competence.
which he made in the context of the corporate sector's support for AIDS vaccine trials. He said that it was
important for the corporate sector “to bear their fair share of responsibility in fighting this disease.” The
key words “fair share” do not imply 'limited quantity' but imply what Peter F. Drucker calls “the limits of Notably, this limit paves the way for partnerships between businesses and other social sector institutions
social responsibility” and these are as follows. that possess the required competence. Such partnerships also make interventions highly cost effective
for business.
25
'Management: Tasks, Responsibilities, Practices' by Peter F Drucker
75 76
In this context it may be noted that pharmaceutical companies in India appear to

operate well within their limit of competence given that:
(i) Their CSR initiatives are largely focused on areas based on their core competencies
i.e. healthcare [vide paragraph 4.1.1 of Section A (Survey of CSR programs)]; and
(ii) Many of them also partner with, or depend on, specialist agencies to carry out their
CSR programs. [vide paragraph 4.3.1 of Section A]
4.3. The Limits of Authority:
The most important, and possibly the least understood, limitation on social responsibility is the limitation
of authority. 'Responsibility' means far more than being a financial support. It implies being
accountable. And whoever says responsibility, also implies 'authority'. One does not exist without the
other. To assume responsibility therefore always means to claim authority.
Again, the question of authority as a limit on social responsibility does not arise in connection with the
impacts of an institution. For the impact is the result of an exercise of authority, even though purely
incidental and unintended. And then responsibility follows.
But where business or any other institution of our society of organisations is asked to assume social
responsibility for one of the problems or ills of society and community, management needs to think
through whether the authority implied in the responsibility is legitimate. Otherwise it is usurpation and
irresponsible.
Every time the demand is made that business take responsibility for this or that, one should ask, “Does
business have the authority -and should it have it?” If business does not have and should not have
authority - and in a great many areas it should not have it - then responsibility on the part of business
should be treated with grave suspicion. It is not responsibility; it is lust for power.
For example, it is not the task of business to substitute its authority for that of the government in areas that
are clearly national policy.
Of course, what are the limits depends in part on circumstances. In a society facing a crisis, the limits
may be more flexible than in a society, which is not.
The key matter that emerges is that even in cases that are beyond the above limits businesses will need to
think through and offer alternative approaches, ultimately, in their own self-interest.
77
5. Assessment and Reporting of activities from a CSR perspective 5.2. Reporting
SUB-SECTION SUMMARY Though reporting on activities from a CSR perspective is not mandatory for companies, it does provide
the following benefits :
Assessment of activities from a CSR perspective provides valuable feedback and facilitates reporting
thereof. It compels a company to carry out an evaluation of its activities from a CSR perspective which itself is
beneficial as mentioned above;
Reporting on activities from a CSR perspective compels a company to assess them in the first place and It enables a company to meet the growing expectation that companies should report on their
also meet the growing expectation that companies should report on their activities from a CSR activities from a CSR perspective.
perspective.
With many of the big or 'best' companies reporting on their activities from a CSR perspective, it has now
Companies can use Reporting Frameworks to aid the description of their activities encompassing all the evolved into a 'best practice'.
three social responsibilities i.e. 'economic performance', minimizing adverse social impacts and
catalyzing social development. As bought out in paragraph 4.5.4 of Section A, 45% of the respondent companies report
on their activities from a CSR perspective. Companies that are not reporting should do
SUB-SECTION so in view of the advantages of reporting as mentioned above.
5.1. Assessment Manner of reporting
When a company evaluates the effectiveness of an activity / activities from a CSR perspective it obtains Companies can simply describe, with statistics if available, the impact of their activities encompassing all
valuable feedback which enable it to considerably strengthen such activity / activities. Such evaluation the three social responsibilities i.e. 'economic performance', minimizing adverse social impacts and
also enables a company to report on these activities to different stakeholders. catalyzing social development.
The evaluation of the activity / activities could be either quantitative or qualitative or both depending on Companies can also use Reporting Frameworks to aid such description. Reporting Frameworks, as the
the nature of the activity involved. Companies do possess skills in evaluating business activities and ones described below, focus on specific parameters / indicators regarding the social impact of a
these can be applied to evaluate the effectiveness of activities from a CSR perspective. company's activities. It is pertinent to note that these Frameworks have originated since a few years and
are still evolving. There are concerns that have been expressed regarding the way some matters are dealt
with by the Frameworks; nonetheless, such Frameworks can serve as a reference point for companies
As brought out in paragraph 4.5.1 of Section A ('Survey of CSR practices'), 75% of the
seeking to formulate their own Framework since they do deal with a variety of parameters / indicators.
respondent companies evaluate their activities from a CSR perspective. Companies
that are not performing such evaluation should do so in view of the advantages
obtainable as mentioned above.
78 79
Reporting Frameworks AA1000 Framework
GRI Guidelines
Presented by The Institute of Social and Ethical Accountability, UK, the framework covers “an
Presented by the Global Reporting Initiative, the GRI guidelines provide a framework to enable accountability standard, focused on securing the quality of social and ethical accounting, auditing and
companies to communicate their economic, environmental and social performance through the
following indicators: reporting. It is a foundation standard, and as such can be used in two ways:
CATEGORY ASPECT As a common currency to underpin the quality of specialized accountability standards, existing and
Customers emergent.
Economic
Suppliers
Direct Economic Impacts Employees
Providers of capital As a stand-alone system and process for managing and communicating social and ethical
Public sector accountability and performance.”
Energy
Water
Environmental
Biodiversity SA8000
Emissions, effluents, and waste
Environmental Materials Suppliers
Products and services Presented by Social Accountability International ('SAI') the SA8000 standard and verification system is a
Compliance comprehensive tool for assuring humane workplaces because it includes :
Transport
a standard that covers all widely accepted international labor rights.
Overall
Employment factory-level management system requirement for ongoing compliance and improvement.
Management/management relations independent, expert verification of compliance: Certification of facilities by auditing bodies
Labor practices and decent work Health and safety
accredited by SAI.
Training and education
Diversity and opportunity
Strategy and management
Non-discrimination
Freedom of association and collective
bargaining
Social
Human Rights Child labor

Forced and compulsory labor
Disciplinary practices
Security practices
Indigenous rights
Community
Bribery and corruption
Society Political contributions
Competition and pricing
Customer health and safety
Products and services
Product Responsibility
Advertising
Respect for privacy
80 81
6. The past and current landscape of CSR Finally, social responsibility was the term used to assert or assign leadership responsibility of the
businessman with respect to the cultur e of the community: service as a trustee on the boards of
educational and religious institutions, and also giving money to philanthropic and other community
SUB-SECTION SUMMARY
causes.
CSR is viewed differently today than what it was in the past.

By and large the traditional approach was not concerned, as it claimed to be, with the social
responsibility of business but with the social responsibility of businessmen. And the greatest
Even today different meanings are ascribed to CSR philanthropy, ethical conduct, public relations, emphasis was put on what businessmen should or might contribute outside of business hours and
risk management, serving 'stakeholder' interests, business strategy, etc. outside their businesses.
Activity in the area of CSR has heightened, culminating in various initiatives. When social responsibilities are being discussed these days, however, the emphasis is quite different.
It is on what business should or might do to tackle and solve problems of society. The emphasis is on
In India CSR is currently perceived by companies to be related largely to ethical behavior, contribution business can make to social problems.
philanthropy and public relations / image building. Also, absence of a clear linkage between CSR
and financial success is identified by them as the principal barrier to CSR. This new concept of social responsibility no longer asks what the limitations on business are, or what
business should be doing for those under its immediate authority. It demands that business take
SUB-SECTION responsibility for social problems, social issues, social and political goals, and that it become the
keeper of society's conscience and the solver of society's problems.
The evolution of CSR

Within this framework, the emphasis of CSR is influenced by the social issues/problems prevalent in
the particular country where it is practiced.
The following observations of Peter F. Drucker26 on the evolution of CSR are relevant even in the
Indian context :
· The current landscape
Since the early sixties the meaning of the words “social responsibility of business” has changed
radically. Across countries, the opinion of business is divided on CSR with cynics at one end to followers at the
other end. Amongst the followers too, opinions and approaches differ some equate CSR with
philanthropy, some with ethical behavior, some with public relations, some with risk management,
Earlier discussions of social responsibilities of business centered in three areas. One was the
some with serving 'stakeholder' interests and some with business strategy.
perennial question of the relationship between private ethics and public ethics - to what extent does
the responsibility of the businessman to the organisation permit him - or perhaps even compel him -
to resort to privately unethical behavior for the good of his organisation? It is pertinent to note that only few companies tightly align their economic and social goals focusing
on all elements of competitive context. The tendency is towards either a loose alignment or a focus
on only one/two elements of competitive context. However, with the benefits of alignment as
The second major topic was the social responsibility which the employer bears toward his
aforesaid becoming more visible, it is expected that many more companies will adopt such strategy.
employees by virtue of his power and wealth.

26
In his book 'Management: Tasks, Responsibilities, Practices'.
82 83
27
In India as per recent surveys , CSR is perceived by businesses to be related largely to ethical 7.1. Myth No. 1 - Responsibility is the same as providing succor
behavior, philanthropy and public relations. Some other notable findings in these surveys were:
Having 'responsibility' may require one to provide 'succor'. But providing 'succor' does not mean having
Absence of a clear linkage between CSR and financial success is identified as the principal barrier 'responsibility'.
to CSR. Having 'responsibility' means being liable for accountability. It also means having authority, which in
turn means the power or right to enforce obedience.
The industry associations have also a critical role to play in sharing of experiences and rewarding However, in practice, 'Corporate Social Responsibility' exists more in the context of being liable to
best practices. provide succor rather than the context of accountability and authority. The problem with this approach
is that its practice will hardly achieve the results that approaches in exercise of the correct perspective of
'responsibility' would achieve.
7. The seven myths relating to CSR
7.2. Myth No. 2 - Corporates are responsible for the common social good
SUB-SECTION SUMMARY
In practice, the expectation of critics is that responsibility for common social good is the responsibility of
The following seven myths are largely responsible for molding the direction of CSR practices as they
corporates. One does not hear of demands for 'ISR' (Individual Social Responsibility), 'USR' (University
stand today:
Social Responsibility) or for that matter, 'GSR' (Government Social Responsibility).
1. 'Responsibility' is the same as providing succor.

Not only is such approach irrational, it is naïve. Corporates command resources and competence and
2. Corporates are responsible for the common social good.
therefore it is logical that they are expected to take the leadership role in taking responsibility for major
3. CSR is equal to ethics, philanthropy and public relations/'image building'. social problems and major social issues28. But it is leadership role, nonetheless. Leadership does not, or
4. There is no clear linkage between CSR and financial success; CSR prevents 'maximization of profits', rather, cannot, function in isolation. It depends, ultimately on the performance of the constituents it
the prime objective of a company. leads. And that includes, in the context of social responsibility, performance by individuals, universities,
5. Self-interest is bad. governments, etc.
6. Society is distinct from a business enterprise.
7. The 'Stakeholder' Theory. In similar vein, though in the context of 'Corporate Governance', Anil D. Ambani, Vice Chairman &
These myths are seriously flawed and are expected to decline over time. M.D. of Reliance Industries Ltd., questioned29 the tendency to test only companies on governance
practices while overlooking to apply the concept to other institutions including the government.
SUB-SECTION
7.3. Myth No. 3 - CSR is the same as ethics, philanthropy and public relations / image building
The following seven myths are largely responsible for molding the direction of CSR practices as they
stand today. However, with overall results of such practices being far less than what is desirable, and · CSR is the same ethics
opinions contrary to the myths beginning to surface in different quarters, it is expected that these myths
will decline with passage of time. A company that adopts unethical behavior will ordinarily not be able to discharge its prime
27 28
The 2002 survey on Corporate Social Responsibility in India by UNDP-PWC-British Council-CII and the 2003 survey on Peter F. Drucker in 'Management: Tasks, Responsibilities, Practices'
29
Corporate Social Responsibility in India by Partners-in-Change. Indian Express, 16 December, 2003
84 85
responsibilities in the manner expected but that does not mean that ethical behavior is a company's requirements for social responsibility are different there the relevant questions are: “Can business
prime responsibility. Ethical conduct raises the probability that prime responsibilities will be tackle these social problems? How should business tackle them?” These are not questions which
discharged but itself it does not ensure that they will be. public relations are equipped to handle. Nor is a PR department equipped to deal with issues relating
to 'economic performance', which is a company's first social responsibility. Consequently, CSR
Furthermore, ethical conduct is not a peculiar requirement for corporates - it is a basic requirement should not be confused with PR.
by which individuals are bound. Peter F. Drucker provides profound insights on the matter of (Besides, efforts by companies to build their image by 'showcasing' their contributions to social
'business ethics', a topical subject today, and these are contained in Appendix B. development often breeds cynicism from the public.)
Therefore, CSR is not the same as ethical behavior or philanthropy or public relations /' image
Hence CSR cannot be equated with ethics - it is much more .

30 building', but is about the social responsibilities of a business as explained in paragraph 3.1. above.
· CSR is the same as philanthropy It may be noted that responses to our survey [vide Section A] in case of some
respondent companies were provided by PR personnel.
'Philanthropy' or 'charity' is one way in which companies could address social problems. However, a
company's responsibilities to society involve far more as explained in this section of the report. 7.4. Myth No.4 - There is no clear linkage between CSR and financial success33; instead, CSR
Hence, CSR cannot be equated with philanthropy - it is much more.

31 prevents 'maximization of profits', the prime objective of a company
Notes Anant Nadkarni, General Manager, TATA Group Corporate Social Responsibility, “…there is There are two myths here, both largely prevalent:
a realization that corporate social responsibility is not just about addressing images of despair.
Corporate Social Responsibility is more about a whole developmental process of planned change. 1. CSR does not strengthen economic performance and instead weakens it.
It may be noted that some of the respondents to our survey [vide paragraph 4.8 of 2. The prime objective of business is maximization of profits.
Section A stated that they had carried out CSR activities with non-profit /
philanthropic motive. Regarding the first myth, paragraph 3.2.3 demonstrates how a company's social and economic goals
can be tightly aligned to achieve significantly higher results as regards both these goals. This proves that
· CSR is the same as public relations / 'image building' there is no inherent contradiction between a company's social goals and economic goals.
According to a 2003 survey of Indian NGOs.com, which polled 196 Companies in India, 58% of To address the second myth:
34
them had entrusted CSR to their PR department. Asserts Peter F. Drucker :
32
However, social responsibility cannot be handled by public relations . Public relations asks whether Asked what a business is, the typical businessman is likely to answer: “ An organisation to make a profit.”
a business or an industry is liked or understood and would be worried if it is not so. But the The typical economist is likely to give the same answer. This answer is not only false, it is irrelevant. The
30
underlying theory, i.e. the maximization of profit, is, in fact, meaningless. In fact, the concept is worse
Similar views are expressed in “Profits & Ethics - Why CSR Makes Business Sense” appearing in The Times of India on 25
January 2004. than irrelevant: it does harm. It is a major cause for the misunderstanding of the nature of profit in our
31
society and for the deep-seated hostility to profit, which are among the most dangerous diseases of an
In his article “A mandate on corporate social responsibility”
33
32
Peter F. Drucker in 'Management: Tasks, Responsibilities, Practices'. Prevalent beliefs as per the 2002 survey on Corporate Social Responsibility in India by UNDP-PWC-British Council-CII.
34
In 'Management: Tasks, Responsibilities, Practices'.
86 87
industrial society. And it is in large part responsible for the prevailing belief that there is an inherent 7.5. Myth No. 5 - Self-interest is bad
contradiction between profit and a company's ability to make a social contribution.
It is not. It is selfishness (i.e. self-interest carried to extremes, unconcerned and intolerant of others35) that
Profit and profitability are, however, crucial for society even more than for the individual business. Yet is bad. However, self-interest is confused with selfishness and fingers are often pointed at companies
profitability is not the purpose of but a limiting factor on business enterprise and business activity. Profit when they are seen to function in terms of their self-interest.
is not the explanation, cause, or rationale of business behavior and business decisions, but the test of It is in a company's self interest that it makes a profit in order to continue to discharge the purpose of its
their validity. Profit is a need needed to pay for the attainment of objectives of the business and it is also existence, and such existence benefits others. It would be the company's selfishness if it were to make a
a limitation in the sense that the objectives of a business must not exceed the profitability with which it can profit at a cost (adverse impact) to others.
expect to operate. Profit is a minimum concept rather than a maximum concept that is, it is crucial to
produce the minimum profit required to pay for the attainment of the objectives of the business and it is
7.6. Myth No. 6 - Society is distinct from a business enterprise
also a limitation in the sense that the objectives of a business must not exceed profitability.
This myth is aptly dealt with by Peter F. Drucker36, as is so much else. He conveys that we treat the
A business, which understands this function of profit, tends to plan more rationally and more
business enterprise as primarily existing by and for itself. True, we have stressed the relationship to the
purposefully to obtain the profitability on which the survival and growth of its business depend.
outside - to customers and market, to the labor unions, to the social, economic and technological forces
at work in our society. But these relations have been viewed somewhat like the relationship between a
Similar thoughts have been expressed by Charles Handy, management thinker and social philosopher, ship and the sea which engirds it and carries it, which threatens it with storm and shipwreck, which has to
rated in many quarters, as being next only to Peter F. Drucker. be crossed, but which is yet alien and distinct, the environment rather than the home of the ship. But
society is not just the environment of enterprise. Even the most private of private enterprises in an organ
The purpose (focus) of a business has been discussed in paragraph 2 above. A company whose of society and serves a social function.
objective is profit maximization will have a different focus one in which its leadership and management
are obsessed with financial goals thereby misdirecting most efforts into financial context (reflected in, 7.7. Myth No. 7 - The 'Stakeholder' Theory
among others, regular meetings to discuss profitability, continuous analysis of profitability statements,
etc.) rather than other important business objectives and resulting in a culture which can only be self
Today's stakeholder theory suggests that just as a company is accountable to shareholders on business
defeating in the long run.
matters and shareholders have a say in the conduct of business, a company is similarly accountable to
the following groups of 'stakeholders' and such 'stakeholders' have a say in the conduct of business:
'Minimum profitability' is not subjective jargon but a level, which can be objectively determined.
· Employees
Cummins India Ltd., for example, had fixed a 'trigger level' as per which any free cash reserves above
· Customers
that level, once it meets the normal dividend, will trigger a recommendation to the Board for a specific
one-time dividend. · Suppliers
Unfortunately, in the Indian context (too), some business leaderships yet speak of 'maximization of · Community
profits/shareholder value'. And some social organisations too (including those that promote CSR)
earnestly believe profit maximization to be the objective of business. This is probably the biggest hurdle This, however, is based more on a confrontationist approach rather than a proper understanding of
to CSR. business.
35
Charles Handy discuses the concept of self-interest and selfishness in his book 'The Hungry Spirit'
36
In 'The Practice of Management'
88 89
It cannot be doubted that a company is liable to ensure that it works to remove any adverse impact it may SUB SECTION
cause to the above group of 'stakeholders'. (This matter has been dealt with in paragraph 3.1.2 above).
However, if such liability is translated to mean that the said 'stakeholders' have a say in business matters
The writings of Peter F Drucker37 and A.P.J. Abdul Kalam38, President of India, both extraordinary
that transcend even the area of impact, it would only jeopardize the business and consequently deprive
intellectuals, on the future in the given context, are similar and indeed noteworthy. Here is what they
society of its utility.
convey:
In this context it is pertinent to note Charles Handy's comments on the 'stakeholder theory':
The Next Society of the world will be a knowledge society. Knowledge will be its key resource, and
I do not, myself, like the idea &.. Stakeholders' language is a nice way of talking about the balancing act knowledge workers will be the dominant group in its workforce. The knowledge society will be a highly
that companies have to perform, but I don't think, myself, that it & provides a sensible answer to the competitive one, for organisations and individuals alike. Given the ease with which information travels,
question 'what is a company for?' It may be analytically convenient to say that the company is working for every institution in the knowledge society not only businesses, but also schools, universities, hospitals
all the stakeholders, but that does not tell you what to do or where to go, if you are the chairman. and increasingly government agencies too has to be globally competitive even though most
organisations will continue to be local in their activities and in their markets.
Incidentally, the choice of the term 'stakeholder' seems to be awry. The word 'stakeholder' has been
defined by the Oxford dictionary as independent party with whom money etc. wagered is deposited. This Knowledge Society will be created by major social changes and it will in turn create further social
As against this most CSR literature defines the term 'stakeholder' as one who affects, or is affected by, the changes. These social changes will be built on education, healthcare, agriculture and governance.
actions of another. Going by the latter definition, a company is also a 'stakeholder' in employees, These will lead to employment generation, high productivity, high industrial growth, and empowerment
customers, suppliers and community. Would that mean that a company has a say in the matters of these of weaker sections, networked and transparent society and rural prosperity.
groups that even transcend the impact that these groups may have on the company?
President Kalam concludes that a Knowledge Society can be the foundation for building a developed
8. The future scenario India a beautiful India, prosperous India and happy India.
SUB-SECTION SUMMARY Peter Drucker concludes that in these times of great uncertainty and unpredictable surprises, even
basing one's strategy and one's policies on trends, which show the emergence of the Next Society, does
· Both, Peter F. Drucker and A.P.J. Abdul Kalam convey that the Next Society of the world will be a not automatically mean success. But not to do so guarantees failure.
Knowledge Society.
It follows that to navigate effectively in this Knowledge Society it will be imperative for
· Social change will be at the core of this Knowledge Society. Employment generation, high companies to pursue CSR that tightly aligns their economic and social goals.
productivity, high industrial growth, empowerment of weaker sections, networked and transparent
society and rural prosperity will be both the cause and result, of this Knowledge Society. In this context it may be noted that in order to navigate the future effectively pharmaceutical
companies in India will need to strengthen their planning for their CSR programs as is evident
from paragraph 4.7 of Section A ('Survey of CSR practices') which indicates that about half of
It follows that to navigate effectively in this Knowledge Society it will be imperative for companies to
the companies only have some sort of geographical / financial / organisational plan relating to
pursue CSR that tightly aligns their economic and social goals, in the interest of themselves and society.
the size and growth of their CSR programs for the next five years.
37
In 'Managing in the Next Society'
38
In 'Igniting India's Mind' published in 'The Week' dated December 28, 2003
90 91
ILLUSTRATIONS
Section C : Illustrations
1. Executive summary
The various perspective presented in Section B have been illustrated in this section with reference to:
INDEX · Indicated developments;
· Practices of the pharmaceutical industry' and
1. Executive summary 97
· Practices of various pharmaceutical and non-pharmaceutical companies / organisations including:
2. Why should business catalyze progressive social development? 99
2.1.Significant business opportunities (beyond 'image building') 99

¨ AstraZeneca
2.2.Protecting 'economic performance' 100 ¨ Dow Chemicals Inc.
3. Discharging the first social responsibility 100 ¨ Pfizer
4. Discharging the second social responsibility 102 ¨ Ranbaxy

¨ Lupin
5. Discharging the ultimate social responsibility 102
¨ Sun Pharma
5.1.Development of factor conditions 103
¨ Nicholas Piramal India Ltd
5.2Development of 'Demand conditions' 109
¨ Dabur Ltd
5.3.Context for Strategy and Rivalry 113 ¨ Larsen & Toubro Ltd
5.4.Related and Supporting Industries 114 ¨ Novartis
6. A note on innovation 116 ¨ Reliance Industries Ltd.

¨ Tata Consultancy Services Ltd.
7. The limits of responsibilities of business 117
¨ Cummins India
8. The past and current landscape of CSR 117
¨ Intel India
¨ AMD India
¨ IBM India Software Labs Ltd
¨ Indian Institute of Technology
¨ Centre for Scientific & Industrial Research
¨ National Innovation Fund
¨ Institute of Rural Management Anand
¨ Tata Institute of Social Sciences
¨ GlaxoSmithKline Biologicals
95 97
Section C : Illustrations Section C : Illustrations
¨ Bill & Melinda Gates Foundation MAIN SECTION

¨ Bayer
¨ Roche The various perspective presented in Section B have been illustrated in this section with reference to:
¨ Singapore Economic Development Board
¨ Abbott Laboratories Indicated developments ;
¨ UNAIDS Practices of the pharmaceutical industry; and
¨ WHO Practices of various pharmaceutical and non-pharmaceutical companies / organisations including:
¨ UNICEF
¨ UN Population Fund In addition this section also contains illustrations of some approaches suggested for pharmaceutical
companies.
¨ World Bank
¨ Merck & Co.
¨ National Institute of Mental Health and Neuro Sciences
2. Why should business catalyze progressive social development? [Refer paragraph 3.1.3 of
¨ Apollo Hospital Enterprises Ltd.
Section B]
¨ Voltas Ltd.
¨ Hewlett Packard India
2.1. Significant business opportunities (beyond 'image building')
¨ Transperency International
¨ Indian Merchants' Chamber
Peter F. Drucker provides examples in his book 'Management: Tasks, Responsibilities, Practices' to
¨ FICCI demonstrate that social problems are major sources of opportunity. The following two of such examples
¨ Wockhardt Ltd are noteworthy even in the Indian context:
¨ American Express
¨ ITC Ltd Julius Rosenwald, the “city slicker” who built Sears, Roebuck, invented and for many years financed
¨ Dr.Reddy's the County Farm Agent. The social problem he identified was the poverty, ignorance, and isolation
of the American farmer who still, in the early years of this century, constituted half of the U.S.
¨ Thermax Ltd
population. Knowledge to enable the farmer to produce more, to produce the right things, and to get
¨ Cadbury India Ltd.
more for his efforts was available. But it was inaccessible to the farmer. The County Farm Agent -
rather than new technology, new machines, or new seeds - became a main force behind the
In addition this section also contains illustrations of some approaches suggested for pharmaceutical “productivity explosion” on the American farm. Rosenwald saw a genuine social problem. But he
companies. also saw a genuine business opportunity. For the farmer's poverty, ignorance, and isolation were
major obstacles to Sears. As the farmer's position and income grew, so did the Sears market. And
Sears came to be identified by the farmers as the “farmer's friend.”
The growth of Olivetti into one of the world's leading producers of office equipment rests on two
insights of the late Adriano Olivetti, who, in the 1920's, inherited a small, unknown, and barely
98 99
viable family company in the small town of Ivrea in northern Italy. Adriano Olivetti saw the Return on capital Return on capital
Industry
opportunity to give his company and his products distinction through good design. Olivetti's design employed (Rank) employed (%)
gave him market recognition within a decade. He also saw in Italy's corrosive class hatred an
Tobacco products 1 37.91
opportunity. The community in which he tried to fuse management and worker in Ivrea gave him Cosmetics & toiletries 2 35.57
exceptional labor productivity, high-quality production, and a work force willing to accept new Mining 3 34.57
technology and changes - and with it competitive strength and profitability. Commercial vehicles 4 33.54
Refinery 5 32.22
Petroleum products 6 32.13
Concludes Drucker: Rosenwald, Ford, IBM's Watson, and Olivetti were all initially ridiculed as Automobile ancillaries 7 28.46
visionaries. No one could solve the problems they tackled, they were told. Ten or fifteen years later, their Lubricants, etc. 8 27.7
solutions were dismissed as “obvious”. The right solution is always obvious in retrospect. What matters is Financial services 9 26.75
that these men and their companies identified a major social problem and asked, “How can it be solved Two & three wheelers 10 26.18
Drugs & pharmaceuticals 11 24.94
as a business opportunity?”
Cement & asbestos products 12 22.27
Computer hardware 13 21.03
2.2. Protecting 'economic performance' Soaps & detergents 14 20.54
Steel tubes & pipes 15 20.21
Computer software & hardware 16 19.79
Corruption corrodes the fabric of business as well as society. According to World Bank figures, the cost Computer software 17 19.74
of corruption represents 5 per cent of the world economy, or more than US$ 1.5 trillion a year .
39 Steel 18 19.44
Aluminium & aluminium products 19 18.27
Construction 20 16.9
As per a Federation of Indian Chambers of Commerce and Industry (FICCI) survey, India's Non-electrical machinery 21 15.4
pharmaceutical exports to West Asia, which is at Rs.263.9 crores in 2002-03, has tremendous growth Copper & copper products 22 15.38
potential but has not been fully exploited due to various barriers in West Asia, corruption being one of Food products 23 13.96
40 Beer & alcohol 24 13.28
them .
Gems & jewellery 25 13.21
Inorganic chemicals 26 12.92
Cement 27 11.25
Polymers 28 10.9
3. Discharging the first social responsibility 'economic performance' [Refer paragraph 3.2.1
Electricity 29 9.98
of Section B] Passenger cars & multi utility vehicles 30 9.61
Textiles 31 8.4
Plastic products 32 7.87
We searched for information on EVA of the pharmaceutical industry in India but were unable to locate
Electrical machinery 33 7.61
any. Therefore, we searched for information on Return on Capital Employed (ROCE) of the Consumer electronics 34 7.12
pharmaceutical industry in India to obtain some sort of picture of the economic efficiency of the industry. Pig & sponge iron 35 7.05
We were able to obtain information on the ROCE of various industries in India including the Leather products 36 6.83
pharmaceutical industry. The results are tabulated hereunder : Tractors 37 6.57
Communication equipment 38 -7.59
SOURCE: CMIE Prowess (Release 2.3)
39
The correlation between the index of absence of corruption developed by Transparency International and real GDP per capita is
0.89, which shows that overall, corruption is associated with low economic development. The pharmaceutical sector ranks eleventh in terms of ROCE thus indicating a fairly high
40
Business Standard 8 September 2004 Target Pharmaceutical exports to West Asia' degree of economic efficiency in terms of ROCE.
100 101
4. Discharging the second social responsibility 'removing adverse social impacts' [Refer 5.1. Development of factor conditions [Refer paragraph 3.2.3.1-1 of Section B]
paragraph 3.2.2 of Section B]
In case of pharmaceutical companies, access to a superior talent pool and advanced research and
(i) AstraZeneca claims to have reduced the emission of greenhouse gases by about 8% between 2001 development facilities are essential for the development of new drugs or increasing the efficacy of
and 2003. Considering emission of greenhouse gases as a percentage of sales, the emission per existing drugs. This in turn creates / sustains higher order competitive advantage. Thus, pharmaceutical
tonne/$m sales has come down by 20% in the same period. By 2005, the Company targets to companies can create / sustain higher order competitive advantage by increasing focus on developing
reduce the emissions by around 7% from the levels in 2003. The other parameters it has considered, the pool of talent, R&D and infrastructure facilities from which they draw.
measured and reduced are energy consumption, CFC emission and waste generated hazardous
and non-hazardous. In this context it is pertinent to note that the cost of developing / acquiring high quality scientific talent in
India is far lower than that prevailing in western countries43. This permits product development to be
By reducing emission, waste, energy consumption, water consumption etc. AstraZeneca has not carried out in India at far lower costs as well as compliance with patent laws and current good
only reduced the negative impact on society but has also reduced costs by way of energy savings, manufacturing practices (CGMP) as prescribed by the US Food and Drug Administration44. A recent
lesser waste disposal costs etc41. illustration is the revelation by Council for Scientific and Industrial Research (CSIR) that they have
discovered the first new TB molecule in more than four decades, at a cost of Rs. 90 million (USD 1.9
(ii) Dow Chemicals Inc. set about systematically to develop the polluting substances it removed from million) to develop over three years and will require an additional investment of Rs.250 million. The cost
smokestack gases and watery effluents discharged from its plants into saleable products and created is less than that of similar efforts by global drug makers.
uses and markets for them.

Large MNC's claim that in the last decade, they have pumped ever-greater sums into drug research, yet
the number of medicines produced has not increased. These companies are watching closely to see if
5. Discharging the ultimate social responsibility 'catalyzing progressive social development
India will emerge as a low-cost center of medical research. Companies such as AstraZeneca have already
[refer paragraph 3.2.3 of Section B]
started acting on this. AstraZeneca, forced by spiraling drug discovery costs, opened a USD 10 million
TB research center in Bangalore last year.45
Alignment of economic and social goals in the pharmaceutical industry
The administration of CSR by pharmaceutical companies, poses certain natural advantages to them vis-
5.1.1. R&D and the pharmaceutical industry [Refer paragraph 3.2.3.1-1(i) of Section B]
à-vis other businesses. The criticality of health care, disesase prevention and family planning to Society
at large and the synergy these areas possess with the businesses of pharmaceutical companies offer an
opportunity for a win-win between the dispensers and beneficiaries of CSR initiatives. The R&D spend of the pharmaceutical companies in India had remained stagnant at around 2 per cent
of the total formulation sales during the period 1980 - 2000.46
For example, Novartis in its hunt for a strategic CSR program structured a solid partnership with World
Health organisation (WHO) to implement a leprosy-eradication program. Novartis believes that its
leprosy program has improved its reputation, built its image, and expanded relationships in public However, during the last few years, Indian pharmaceutical companies have increased their R&D
health arenas and with national governments. Norvartis also points to new commercial benefits, spending to around 5% of their revenue with some companies' spend reaching 7%. 47
including the identification of unexplored geographies and markets, and new business opportunities.
According to a Novartis spokesperson, learning to operate in developing markets with complex
43
The employment costs of a research scientist in India are 16-25 per cent of that of a US scientist - Pharmaceutical Industry Annual
regulatory environments has been an important business-related benefit. (For detailed case study,
Review February 2004 (CRIS INFAC)
please see Appendix C)42 44
Pharmaceutical Industry Annual Review February 2004 (CRIS INFAC)
45
Business Standard 6 September 2004
46
41
AstraZeneca Corporate Responsibility Report 2003 Pharmaceutical Industry Annual Review February 2004 (CRIS INFAC)
47
42
'Corporate Social Responsibility Opportunities for Reproductive Health' Working paper CMS; May 2004 Economic Times 24 August 2004 - Pharma walks the thin R&D line
102 103
Notably western companies spend about 15% of their revenues on R&D. International pharmaceutical High levels of corporate interface are typical in Germany and Switzerland, an important reason why
player Pfizer, for instance, spent USD 7.1 billion in 2003 on R&D, close to 17% of its revenues. these nations have been able to upgrade factors and sustain innovation in industries for many
Interestingly, the entire revenue of the Indian drugs industry is less than the amount Pfizer spends on decades.
48
research each year.
Major pharmaceutical companies worldwide have realized the benefits of such interface and have
However, with the product patent regime to be implemented in the near future, Indian drug companies taken steps in this direction. Some instances are:
have been increasing their attention on R&D. For example, the R&D expenditure of Ranbaxy is
expected to touch 10% of total sales by 2007, from around 7% now. Lupin plans to triple its R&D
Novartis has developed Coartem® with the Institute for Microbiology and Epidemilogy in
49
spends from about 3% of sales to 8% this year. Nicholas Piramal India Limited, the second largest
Beijing by combining a traditional Chinese plant-based remedy with a synthetic substance. The
pharmaceutical company in India, has earmarked a Rs.100 crore investment for R&D activities for the 53
resulting oral, fixed dose is the fastest acting anti-malarial medicine .
FY's 2003-04 and 2004-05. The company will double the number of scientists at its R&D facilities to 400
51
by 2007. Dabur Ltd., as part of its initiative in the social sector, has established Sundesh, a Sustainable
Development Society, a non-profit organisation to promote research and welfare activities in rural areas. The Pfizer foundation has also funded an Infectious Disease Institute at one of the leading
Dabur has set up the "Plants for Life" project in the mountainous regions of the Himalayas. Under the medical schools in Africa. The Institute is operated by AACP in partnership with the
project, a high-tech greenhouse facility has been set up for developing saplings of rare and endangered university.54
medicinal plants. Fully computer-controlled and monitored, this greenhouse maintains the highly critical
environmental parameters required for their survival. Dabur is also developing quality saplings of more CSIR claim to have discovered the first new TB molecule in more than four decades at a
than 20 herbs, 8 of them endangered, through micro propagation. substantially lower cost than the international drug companies, marking a breakthrough in
combating a disease that kills 3 million people worldwide each year. The new molecule has excited
5.1.2. Influencing / participating in community investment [Refer paragraph 3.2.3.1.-1(ii) of Section B] India's research community because it represents a triumph for a public private drug discovery
project launched in 2000 under the New Millennium Indian Technology Leadership Initiative.
Twelve government research centers and universities and Lupin jointly developed the
5.1.2.1. Sponsoring students
molecule. Eight million new cases of TB are registered each year, including 1 million in India, mostly
women. The economic cost of the disease is estimated at Rs.120 bn annually in lost working days in
· The construction division of Larsen & Toubro Ltd. sponsors engineering graduates interested in India.
55
52
pursuing M.Tech in Construction Technology and Management in IITs (Indian Institute of
Technology), paying the entire costs of the course and a monthly stipend. On completing the
Some instances with respect to other industries in India include:
course, candidates are considered for employment, and, if selected, have to serve with the company
for at least five years.
Reliance Industries Ltd. is interacting with several graduate/post-graduate educational
institutions to enable their faculty to understand industry needs. Steps include secondments of
5.1.2.2. Interfacing with educational/research institutions:
faculty to the company and of company employees to the institutions, analyzing case studies by the
faculty, etc.
Some instances of such interface are:
48
Business Standard 'A trial in globalization' - 18 August 2004
49
Business Standard 12 October 2004 'CII seminar on Pharma sector' 53
51
Economic Times 9 September 2004 'Nicholas in strategic spread plan' “Building healthier societies through partnership” IFPMA report May 2004 update
54
52
As per The Economic Times of 28 January 2004, the U R Rao committee set up to review India's technical education system points out “Building healthier societies through partnership” IFPMA report May 2004 update
55
that India is just not producing enough M. Techs and PhDs. Business Standard 6 September 2004 'India claims it has made a breakthrough in TB'
104 105
Tata Consultancy Services Ltd. ('TCS') has drawn up a model to enrich India's top-end resurgence in several countriesl, CSIR claims to have discovered the first new TB molecule in more
engineering talent pool by upgrading some key colleges to the famed IIT (Indian Institute of than four decades as mentioned above.
Technology) standards.
Companies could tap the database of innovations being incubated .by National Innovation
The upgrading of these colleges would involve strengthening areas of governance, administration, Foundation56 (NIF). Set up by the Department of Science and Technology, NIF promotes
finance, curriculum, facilities and student selection. This will create a clutch of world-class graduate innovations developed by individuals. Most of the innovators are from the rural sections of the
schools that will churn out bright young minds ready for radical innovations in engineering society. It has thousands of innovations in its database covering a wide variety of areas, few of which
processes, product development and fundamental research. have even been patented in the U.S. Included in its database are several instances of use of herbs to
cure different diseases. These could well be the subject of further pharmaceutical research given that
57
Novartis has developed a drug based on a Chinese herb which combats malaria more effectively.
TCS estimates that the IITs together produce about 3,000 top class engineers, of which 2,000 go
abroad. However, by upgrading other key colleges, it expects to produce 25,000 to 30,000 top class
engineers. Some of the innovations identified by NIF are given in Appendix D.
TCS would benefit significantly too since it is the largest employer of engineering graduates in India. Companies seeking rural intervention in areas of interest could increase interface with institutes such
58 59
as Tata Institute of Social Sciences (TISS) and Institute of Rural Management Anand ,
(IRMA), to obtain insights that could make their interventions highly effective.
Reliance Industries Ltd. has entered into an agreement under the New Millennium Indian
Technology Leadership Initiative with the Council of Scientific and Industrial Research
(CSIR) for developing breakthrough technology in key areas from laboratory to commercial scale 5.1.2.3. Involvement with Foundations and Government organisations
wherein Reliance will be offered the first right to IPR (Intellectual Property Right) for commercial
development. Several pharmaceutical companies, for example, partner with Foundations and Government
organisations. Once there appears to be mutual interest in collaboration and a clearer understanding of
Cummins India, Intel India, AMD India, have entered into technical collaborations with the what each side can offer, public health partners usually welcome pharmaceutical company
IITs (Indian Institute of Technology) under which these companies will fund research leading to involvement, which may include plans for cost recovery, education, monitoring and working with both
technology development relevant to these companies. local and non-government partners.
IBM India Software Labs Ltd ('IBM India') has set up a center for advanced studies at its Illustrations of such partnerships are:
Bangalore facility. The facilities would enable universities to access IBM India's product
development, supporting infrastructure and other resources while IBM India has the opportunity to GlaxoSmithKline Biologicals, the world's largest vaccine manufacturer has tied up with
work with academic leaders and researchers, leading to development of leading solutions for both, Malaria Vaccine Initiative (MVI), a program funded by the Bill & Melinda Gates
the academia and IBM India. Foundation and administered by the Program for Appropriate Technology in Health (a US
not-for-profit), to ensure that a malaria vaccine is developed. The company will explore
Some possibilities of such interface for pharmaceutical companies could be: commercialization, procurement and delivery strategies that will maximize public health sector
56
www.nifindia.org
Companies can fund research by CSIR / IITs (Indian Institute of Technology) to assist the process of 57
“Building healthier societies through partnership” IFPMA report May 2004 update
58
developing new drugs. For example, against the background of TB threatening to make a dangerous www.tiss.edu
59
www.irma.ac.in
106 107
availability in the countries most affected by malaria. In India there are many industry associations. However, their focus on upgrading the pool of factors
AstraZeneca announced a $35 million, 5-year program, committed to finding a new treatment for relevant to their industry has been low. Pharmaceutical industry associations in India have the
TB. The centerpiece of the initiative is the creation and funding of new laboratories in Bangalore opportunity to increase focus on upgrading the pool of factor conditions.
totally dedicated to TB research. In partnership with the Indian government, the company also
supports the local scientific community by providing research scholarships in local 5.2. Development of 'Demand conditions' [Refer paragraph 3.2.3.1.-2 of Section B]
60
universities and hospitals.
The Medicines for Malaria Venture (MMV) is a public-private partnership to discover, 5.2.1. Seek out 'buyers' with difficult needs [Refer paragraph 3.2.3.1.-2(i) of Section B]
develop and deliver new anti-malarial drugs for use in developing countries. Its partners
include companies like GlaxoSmithKline, Novartis, Bayer, Roche and Ranbaxy. Capital
There are several instances of pharmaceutical companies in western countries that have sought out such
financing for drug discovery comes mostly form public sources and industry primarily contributes in
'buyers' with difficult needs. Through innovative partnerships with other organisations these companies
kind.
have developed the health care infrastructure and subsidized the cost of drugs. This has enabled these
Global Alliance for TB drug development (TB Alliance) consists of industry (represented by 'buyers' to access medicines and that too at lower costs. In addition to the social impact, the illustrated
companies like Novartis India, Bristol-Myers Squibb etc.), NGO's and foundations working together 61
initiatives have widened the market of the drug companies. Some of these illustrations are:
to accelerate the discovery and development of cost-effective new drugs. The TB Alliance
draws on the best practices and resources of the public and private sectors. The partnership
· Novartis in its hunt for a strategic CSR program structured a solid partnership with World Health
functions as a virtual R&D organisation.
organisation (WHO) to implement a leprosy-eradication program. Novartis believes that its leprosy
Novartis Institute for Tropical Disease (NITD), based in Singapore, is a public-private
program has improved its reputation, built its image, and expanded relationships in public health
partnership between Novartis and the Singapore Economic Development Board. The new
arenas and with national governments. Norvartis also points to new commercial benefits,
$122 million research center will focus exclusively on the discovery of innovative drugs for the
including the identification of unexplored geographies and markets, and new business
treatment of diseases that are endemic to developing countries. Novartis and the TB Alliance are
opportunities. According to a Novartis spokesperson, learning to operate in developing markets
currently coordinating efforts at NITD.
with complex regulatory environments has been an important business-related benefit. (For detailed
Most of the above partnership programs are enhancing local capacity by strengthening the country's case study, please see Appendix C)
62
health care infrastructure and / or technical skills.
· Abbott Laboratories launched Abbott Access in 2001 to provide the company's HIV products
5.1.2.4. Involvement with industry associations
to 68 developing countries including all of Africa. The company provides two of its drugs at a loss
63
and one HIV antibodies tester at no profit as part of the program. This initiative, along with those
The following are instances of industry associations that have actively worked to upgrade the pool of of other companies, will encourage governments and other sources of international
factors, which has benefited their entire industry: funding to help develop the infrastructure necessary to ensure broader availability of
64
antiretroviral treatment and care for people living with HIV/AIDS in developing countries.
In America electronics industry association.
In Italy - apparel, shoe, ceramic tile and furniture industry associations.
In Japan - umbrella trade associations.
61
“Building healthier societies through partnership” IFPMA report May 2004 update
62
'Corporate Social Responsibility Opportunities for Reproductive Health' Working paper CMS; May 2004
63
Even if drugs are provided at 'no-profit-no-loss' prices, the R&D costs, which are usually the biggest component of the total drug cost,
are recovered to the extent of off-take generated reducing the cost burden on account of R&D per tablet.
64
60 “Building healthier societies through partnership” IFPMA report May 2004 update
Business Standard 6 September 2004 'A trial in globalization'
108 109
· Accelerating Access Initiative (AAI) is a cooperative endeavor of UNAIDS, WHO, UNICEF, Particularly in the context of wider acceptability by 'buyers' in rural areas, pharmaceutical companies
UN Population fund, the World bank and seven research-based pharmaceutical can research on the use of herbs in formulation of their drugs. For example, Novartis has developed
companies (viz. Abbott Laboratories, Bristol-Myers Squibb, GlaxoSmithKline, Merck & Co. etc.) Coartem ®, the fastest acting anti-malarial medicine by combining a traditional Chinese plant based
to find ways to broaden access while ensuring rational, affordable, safe and effective use of drugs remedy with a synthetic substance.
for HIV/AIDS related illnesses. The companies, individually, have offered to substantially improve
access to, and the availability of, a range of medicines by providing more affordable prices in Some instances from other industries are as follows:
developing countries.
Apollo Hospital Enterprises Ltd., a private sector hospitals group in India, is pursuing the use of
· The Government of Tanzania, Abbott Laboratories and the Abbott Laboratories Fund telemedicine to reach out to people in remote areas. Telemedicine is the use of communication
have partnered to work towards strengthening the country's public health care system and technology to link up nodal centers in remote areas to speciality hospitals in city centers whereby
expand its ability to treat and care for HIV patients. inputs on patient conditions are provided at the nodal centers to the speciality hospitals through
communication technology based on which patients/nodal centers are advised on the course of
· GlaxoSmithKline (GSK) developed an African Malaria partnership in 2003 to develop treatment.
effective malaria control behaviors in African communities. GSK is also providing all of its
antimalarial medicines at not for profit prices in all the Least Developed Countries and all The social benefit is the availability of medical services hitherto unavailable or available with
the countries of sub-Saharan Africa. difficulty, at a lower cost. Apollo Hospitals benefits economically too with availability of more
patients; also, pursuing telemedicine has 'forced', and continues to 'force' Apollo Hospitals to
· Novartis in partnership with WHO has undertaken to supply unlimited quantities of Coartem® to innovate to reduce the costs involved.
public sector agencies of malaria endemic countries. Furthermore, the partnership aims at
establishing sustainable supply-chains for distribution; improving treatment regimens in Voltas Ltd. has recently launched a refrigerator specifically designed for rural areas and lower
malaria endemic countries and monitoring systems for new malaria drugs in the developing income groups at an economy price. With features and technology ('Direct Cool' technology)
world. specially suited for these markets, the company had sold about 7,000 units till the middle of 2003.
· The Inter-Company Collaboration on AIDS Drug Development (ICCADD) is a long-term Undoubtedly, Voltas would apply the innovation learned in the process of producing this refrigerator
initiative in Africa supported by Merck & Co. that assists with medical training needs. The with immense benefit to other segments, given that this 'Direct Cool' category continues to drive the
initiative is the first of its kind and sponsors physicians for an intensive one to four week HIV/AIDS volumes of the overall refrigerator industry with over 75% market share in value terms.
training program in France. The program encourages participants, most of whom are members of
their national AIDS control programs, to organize and conduct local training sessions to educate
Hewlett Packard India ('HPI') carefully studied the underlying needs of people in the
their peers, nurses and counselors on the proper management of HIV/AIDS.
economically and socially deprived area of Kuppam in South India and evaluated how such needs
could be addressed by HPI's expertise. HP focused on creating public-private partnerships to
· Pfizer's Diflucan Partnership Program not only provides Diflucan, an antifungal medicine, but accelerate economic development through the application of technology while simultaneously
also educates and trains health professionals in the diagnosis and treatment of opportunistic opening new markets for itself by developing new products and services.
infections. More than 18,000 health care professionals have been trained in the countries
participating in the programs.
By assembling an ecosystem of public and private partners, HP hopes to turn the Kuppam region
into a thriving, self sustaining economy where greater access to technology permanently improves
110 111
65
literacy, creates income, and provides access to government services, education and health care. 'The Cairo Consensus at ten: Population, Reproductive Health and the Global Effort to End Poverty'
report states that more than 80% of the developing countries say that available resources do not
meet their reproductive health needs. The report further said that more than 350 million couples still
Several banks and organisations have been extending micro credit to Self Help Groups (SHGs)
lack access to a full range of family planning services while complications of pregnancy and child
very successfully. This has significantly improved the economic and social position of the SHGs. At
birth remain a leading cause of death and illness among women with 529,000 of them dying each
the same time, it has proven to be commercially rewarding for the banks/organisations and has also
69
year, mostly from preventable causes.
'forced' them to be more innovative in their approaches.
Few social programs make as significant a contribution to reducing poverty as family planning.
5.2.2. Increase focus on segments requiring urgent attention [Refer paragraph 3.2.3.1.-2(ii) of Section B]
Companies rationally and programmatically link and bundle Family Planning/Reproductive Health
to HIV or other health initiatives. With a relatively small investment, companies can make a
In general, the revenue growth of a pharmaceutical producer depends on the new product 70
tremendous impact in this area.
66
introductions, which fulfill unmet therapeutic needs . Hence by increasing focus on segments requiring
urgent attention not only would pharmaceutical companies benefit but society would also benefit.
Following are some such segments :
5.3. Context for Strategy and Rivalry [Refer paragraph 3.2.3.1. 3 of Section B]
Mental healthcare in India needs emergency treatment

· Companies in India can be seen to be increasingly turning towards putting employees through
spiritual (different from religious) programs and routinely dealing with employees in a manner that
Experts are of the view that the Indian Healthcare set-up requires ten times the government funding
promotes their values/well being. (On the other hand, there are yet companies who have drawn up
it receives now. The government spends less than one percent of its total health budget on mental
professional looking statements of company core values and conduct but these remain only on
health of a population of more than one billion. The number of psychiatrists in the country total to
paper.)
some 3,500 roughly one psychiatrist for a population of 2.8 lakh. Further, almost all of India's
mental health care resources and about 70-80% of the psychiatrists are located in urban areas, · Several companies have joined to support Transparency International in its work to disclose and
leaving rural areas high and dry. Our current capacity of treating long-stay patients at mental deter corruption around the world. Transparency International has also come out with guidelines for
hospitals is more or less the same as it was at the time of independence; i.e. one bed for over 40,000 Indian companies to counter corruption. The Indian Merchants' Chamber (IMC) is developing a
people.
67 corpus to be used to reward good public governance as a means to provide civil pressure to stop
corruption. Companies could actively support such endeavors, much to their own benefit.
The potential market for drugs used to treat depressions (anti-depressants) can be gauged by the fact
In this context, it is pertinent to note that as per a Federation of Indian Chambers of Commerce and
that 1 in every 15 adult Indians suffer from depressive illness and at least 10 per cent of the
Industry (FICCI) survey, India's pharmaceutical exports to West Asia, which is at Rs.263.9 crores in
population suffers from depression that needs professional and medical help according to a study by
68 2002-03, has tremendous growth potential but has not been fully exploited due to various barriers in
the National Institute of Mental Health and Neuro Sciences (NIMHANS).
71
West Asia, corruption being one of them.
Lack of donor commitment delays population goals
65
A detailed article analyzing HPI's efforts in this regard appeared in Harvard Business Review, August 2003
66 69
Pharmaceutical Industry Annual Review February 2004 (CRIS INFAC) Free Press Journal 'Lack of donor commitment delays population goals'
67 70
Free Press Journal 'Mental healthcare in India needs emergency treatment' 'Corporate Social Responsibility Opportunities for Reproductive Health' Working paper CMS; May 2004
68 71
Pharmaceutical Industry Annual Review February 2004 (CRIS INFAC) Business Standard 8 September 2004 Target Pharmaceutical exports to West Asia'
112 113
5.4. Related and Supporting Industries [Refer paragraph 3.2.3.1. 4 of Section B] ITC Ltd has launched its eChaupal business model as per which it has set up information centers
with Internet access in rural areas. Farmers can access real time information and customized
Clinical Trials Industry knowledge such as prevailing price trends for crops, local weather forecast and farm practices to plan
their sowing and harvesting operations leading to better quality, productivity and improved price
discovery.
In the context of the pharmaceutical industry, the Clinical Trials industry is a critical supporting industry.
Clinical development of a new molecule constitutes one of the most vitally important steps that any
pharmaceutical company has to take; it is the most complex, critical and cost intensive of all. 72 For ITC, whose business model is inextricably linked with the farm sector, the eChaupal initiative
places ITC in a unique position of trust with the farming community as a reliable supplier of goods
and services on the one hand, and as a buyer of high quality cost effective farm output on the other,
Working to develop the Clinical Trials industry would benefit both the pharmaceutical sector as well as
thereby supporting its own competitiveness.
society.
ITC, which began with just six eChaupals in June 2000 now has 3000 such Internet centers covering
The pharmaceutical sector would benefit in terms of the compression of development cycle time of
18,000 villages reaching some 1.8 million farmers and has future plans to arrive in 100,000 villages,
drugs and substantially lower Clinical Trial costs.
or one-sixth of rural India, within a decade.
Society would benefit in terms of advancement of its skill and resource base. The patients participating in
ITC's eChaupal initiative has been described as having the potential to transform the Indian farm
Clinical Trials would benefit, as they would receive more intensive medical care at no cost. The
sector, which is the source of livelihood for about 70% of Indians. “It is a new form of liberation,” CK
physicians will benefit as they would be able to access 'state of the art therapy' for many patients that
Prahlad, who led a case study on eChaupals for the University of Michigan Business School, said of
otherwise may be deprived of therapeutic advances. There would also be important spin-offs of the
the transparency and access to information they give to farmers.
development of Clinical Trials industry on the health care and service system e.g. improving hospital
infrastructure.
There are several instances of contract farming in India that have benefited both the farmers and
the companies. While the farmers get access to new technology, know-how and farm inputs, besides
Appendix E gives an overview of the state of Clinical Trials industry in India.
assured marketing and returns, leading to higher yields, the companies get assured supplies of raw
materials of the desired quality.
Hospital Industry
In the context of the health care (hospital) industry in India whose fortunes are constrained
The Hospital sector is also an important related industry for the pharmaceutical industry. Working to largely due to the lack of development of the medical insurance industry, health care companies
develop the Hospital sector would also benefit both, the pharmaceutical industry and society. Notably, could contribute to the development of the medical insurance industry by, for example,
large Indian pharmaceutical companies like Wockhardt Ltd. and Ranbaxy Ltd. have set up specialty encouraging/assisting State Governments to emulate Karnataka's recently sponsored health
hospitals. insurance scheme which covers 17 lakh farmers for complete major surgical procedures and post
operative treatment at a paltry cost (Rs.5/- per month) to the farmer.
Some illustrations in other industries are:
The social benefit is that it enables the poor to seek health care, which was hitherto unaffordable or
affordable at a crippling cost. The economic benefit to the industry would be a significantly
enhanced customer base.
72
CII report on 'Clinical Research Road Map for India'
114 115
Since 1986, American Express had funded Travel and Tourism Academies in secondary schools, 7. The limits of responsibilities of business for catalyzing progressive social development
training students not for the credit card business, its core business, nor for its own travel services, but [Refer paragraph 4.2. of Section B]
for careers in other travel agencies as well as airlines, hotels and restaurants, thus making the travel
clusters more competitive. The program operates in ten countries with more than 120,000 students
The Limits of competence
enrolled. It provides the major social benefits of improved educational and job opportunities for
local citizens. There is also significant economic gain for American Express since it depends on
73 The 'TATA guidelines for community development' which serve to guide all TATA companies, explicitly
travel-related spending for a large share of its credit card and travel agency revenues.
recognize that all social interventions of TATA companies will be based on their core competencies
bearing in mind that companies do not have the skills and expertise of social development agencies.
6. A note on innovation [Refer paragraph 3.2.3.3. of Section B]
Similarly, Novartis state that their cornerstones of their commitment to corporate citizenship are 'active
The need for product innovation in the pharmaceutical industry engagement in society in areas where we are competent'.
Over a longer timeframe of 8-10 years, as the proportion of new molecules (post-1995) increases, the 8. The past and current landscape of CSR [Refer paragraph 6 of Section B]
Indian pharmaceutical market will witness a gradual shift in market share in favor of innovator
companies. The transition will be aided by increasing affordability, higher penetration of medical
The current landscape
insurance and larger share of drug consumption in the therapeutic categories like CVS, CNS and anti-
74
cancer.
The West has seen heightened activity in the area of CSR in the recent decade. (Such heightened activity
has also resulted in a number of organisations set up to promote CSR (such as 'Business for Social
Following are some instances of efforts of companies in India to pursue innovation:
Responsibility' in the U.S. and 'Business for the Community' in the U.K., being amongst the larger ones).
It has also resulted in initiatives such as:
R&D is getting a new boost with drug patents coming into effect from 2005 as part of WTO's
intellectual property rules. Indian companies like Nicholas Piramal, Ranbaxy and Dr.Reddy's have
The United Nations Global Compact76 that provides principles in areas of human rights, labor and
invested in innovation and plan to harness skills in medicinal chemistry to shift from re-engineering
environment for businesses.
other people's drugs to developing their own. Companies like Ranbaxy expect 40 per cent of its
revenues form innovative products by 2012. Just as in the IT industry, cost is the key competitive
advantage, with India having a huge number of trained scientist prepared to work at a fraction of The Dow Jones Sustainability Group Index comprising companies that satisfy certain sustainability
European or US salaries. Indian companies estimate the cost of hiring a researcher is one-third to performance criteria; often used as a basis for ethical investment of funds.
75
one-fifth of the US rate.
A Financial Times/Stock Exchange Index the FTSE4Good the UK version of the Dow Jones
Thermax Ltd. has instituted an award to reward employees who suggest innovative practices that Sustainability Index.
significantly enhance the company's fortunes.
77
Rating companies on their level of CSR by Pensions Investment Research Service Company
Cadbury India Ltd. is the 'Innovation Centre' of Cadbury Schweppes plc for new products. (PIRC).
73
'The competitive advantage of corporate philanthropy' by Michael E. Porter and Mark R. Kramer.
74 76
Pharmaceutical Industry Annual Review February 2004 (CRIS INFAC) www.unglobalcompact.org
75 77
Business Standard 18 August 2004 www.pirc.co.uk
116 117
Section D : Conclusions & Way Forward
As is evident from Section A - 'Survey of CSR practices', pharmaceutical companies in India engage in various
social areas, in particular, healthcare, reaching out to a wide array of constituents of the marginalized sections.
The various processes deployed in implementing CSR (i.e. approach, investment, evaluation and planning)
have varied degrees of effectiveness as detailed in Section A.
Based on the above, and analyses of various perspectives of CSR together with suggestions as discussed in
Section B, as well as illustrations presented in Section C, the following outlines the way forward to make CSR
practices of pharmaceutical companies in India more effective:
· Focus on discharging all three responsibilities to society i.e.:
Ø Fulfilling 'economic performance' by achieving a positive EVA.
(vide paragraph 3.2.1. of section B)
Ø Removing / reducing adverse social impact by identifying the impacts and taking specific
steps for their elimination / reduction.
CONCLUSIONS
AND (vide paragraph 3.2.2. of section B)
WAY FORWARD
Ø Catalyzing social development by tightly aligning the company's economic and social goals.
Such alignment has the following important outcome:
It enables a company to achieve significantly greater results as regards both its goals.
economic and social, compared to the results obtainable if these goals were pursued
separately.
Such alignment can be achieved by focusing on the four elements of competitive context
that lie embedded in the social framework, as follows:
· Assessing level of availability of factor conditions talent, knowledge and infrastructure.
Developing factors through direct investment (e.g. R&D) and / or through influencing /
participating in community investment e.g. involvement with foundations / government
organisations / industry associations.
121
Section D : Conclusions & Way Forward Section D : Conclusions & Way Forward
Developing ' demand conditions' by: (vide paragraph 3.2.3.3 of section B)
Seeking out 'buyers' in rural areas with difficult needs to secure pressure for Stay within the three limits while catalyzing social development viz. refrain from taking up any
innovation in cost reduction or different product features; and activity that jeopardizes the company's basic function of 'economic performance' by eroding the
minimum profitability required by the risks of the business and its commitments to the future;
Increasing focus on healthcare segments requiring urgent attention. refrain from taking up tasks for which it lacks competence and refrain from taking up any activity
in areas in which does not and should not have the authority implied in the responsibility for
those areas.
Improving the context for strategy and competition by:
(vide paragraph 4 of section B)

Undertaking in-house programs / steps to promote employee values and well being,
and incorporate these in routine functioning; and
Look beyond the seven myths relating to CSR viz. 'responsibility' is the same as providing
succor; corporates are responsible for the common social good; CSR is equal to ethics,
Influencing removal of unfair trade practices.
philanthropy and public relations/image building; there is no clear linkage between CSR and
financial success; instead CSR prevents 'maximization of profits', the prime objective of a
Contributing to developing related / supporting industries e.g. Clinical Trials industry
company; self-interest is bad; society is distinct from a business enterprise; and the 'Stakeholder'
and Hospital industry.
Theory.
(vide paragraph 3.2.3. of section B)

(vide paragraph 7 of Section B)
Explore avenues to partner with other companies in carrying out CSR programs.
Strengthen CSR evaluation and reporting initiatives in order to provide valuable feedback and
make the initiatives more effective.
Address social goals that cannot be aligned with economic goals through 'philanthropy' carried
out in an effective manner. This can be done by selecting the best grantees; partnering with
other funders, improving the performance of grant recipients and advancing the state of
knowledge and practice in the areas sought to be impacted.
Strengthen geographical, organisational and financial planning for CSR programs for the future.
(vide paragraph 3.2.3.2 of section B)

Disclaimer
Increase the involvement of the Board and senior management in the implementation of CSR
programs since strategies aligning economic and social goals will have a significant bearing on
The information contained herein is not intended to address the circumstances of any particular entity.
the strategic context of the business of companies.
Although we endeavor to provide accurate and timely information, there can be no guarantee that such
(vide paragraph 3.2.3.2 of section B)
information is accurate as of the date it is received or that it will continue to be accurate in the future. No one
should act upon such information without appropriate professional advice after a thorough examination of the
Move towards pursuing innovation in a regular and systematic manner since the suggested
particular situation.
strategies can succeed only where an innovative approach is adopted in formulation and
implementation.
122 123
Appendices
Appendix 'A' - Manner of Calculating Economic Value Added (EVA).
Shareholders of a publicly traded company have alternative investment opportunities in the form of shares of
other equity securities, fixed income securities, corporate bonds and other financial instruments. Investors
would not invest in a company unless their expected rewards fully compensate them for the risk at which they
place their capital. Investors earning returns below expectations will quickly move their investment to other
opportunities.
Numerous techniques exist to measure the relationship between risk and reward. The Capital Asset Pricing
Model (CAPM) is the standard risk return model against which all others are measured. The CAPM is commonly
used by economic and financial practitioners to measure the expected return that investors require to make an
equity investment because it is applicable to all types of investments, distinguishes between risks that are
rewarded and those that are not, is standardized across investors and investments, quantifies returns expected
from differing risk levels, and has been verified with market evidence.
In the CAPM, reward is defined as the “expected return” on an investment, and the principal risk investors face is
shown to be the variance in the expected returns. CAPM is built on the premise that the variance in returns that
cannot be diversified away is the appropriate measure of risk. This nondiversifiable risk is captured in a measure
known as 'beta', which is computed as the ratio of the covariance of returns of an individual asset (or a portfolio
'A' TO 'G' of assets) to the covariance of returns on a fully diversified (and risk minimized) market portfolio. Assets with
betas that exceed 1.00 are riskier than the market portfolio. Assets with betas less than 1.00 have less risk.
Under the CAPM, the expected return on an equity investment is computed as:
E(R) = Rf + Be(E{Rm}-Rf)
where,
Rf is the risk free rate,
E{Rm}- Rf is the market risk premium, and
Be is the equity beta.
The risk-free rate is the return on an asset with no inherent systematic risk. Since riskless equity portfolios do not
exist in practice, the risk free rate is generally approximated by the rate on government bonds, which are
considered to represent the safest available long-term returns.
The risk premium is the historical difference between average returns on stocks and average returns on risk-free
securities. This can be computed, for example, by reducing the average returns on long-term Government
127
Appendices Appendices
Treasury Bonds over a long term from the geometric mean of the stock market premium over the same long WACC = Ke(E/{E+D}) + Kd(D/{E+D})
term.
Cost of debt, Kd, is the rate paid on outstanding long-term debt on an after-tax basis. The cost of debt is
For publicly traded companies, beta is available from a number of public data sources. For private companies, computed as :
betas must be estimated from those of comparable public companies. Operating and financial leverage are
important characteristics of risk and are criteria for determining comparability.
Kd = (Average Interest Rate) (I-Tax Rate).
Operating leverage is a function of the relationship between fixed and total costs. Firms with high fixed costs to
To fully compensate all investors (equity and debt), a company would need to earn a return on invested capital
total costs experience greater earnings variability and will often have a higher beta than firms operating in high
as indicated by the WACC. Earnings in excess of such return denote positive EVA and contribute to shareholder
cost environment.
wealth. Earnings below such return denote negative EVA and represent a destruction of shareholder wealth.
Firms with rising levels of financial leverage will also experience an increasing equity beta. As debt increases,
interest payments reduce profits that would otherwise accrue to equity holders. Greater debt also increases
bankruptcy risk, which is borne to a greater extent by equity investors (as opposed to bondholders).
The CAPM measures the expected return on a company's equity. From the perspective of a company, this return
is considered a cost of business since it is compensation that is expected by shareholders, and is often referred to
as the “cost of equity.” To understand the total return expected for a company, we must consider the weighted
average of the “costs” of the different components of financing, including debt, equity and hybrid securities.
This weighted average of costs is referred to as the “weighted average cost of capital” (WACC). The form of the
WACC computation is:
WACC = Ke(E/{E+D+PS}) + Kd(D/{E+D+PS}) + Kps(PS/{E+D+PS}), where,

Ke is the cost of equity,
Kd is the after-tax cost of debt, 1
Kps is the cost of preferred stock,
(E/{E+D+PS}) is the proportion of equity in the funding mix,
(D/{E+D+PS}) is the proportion of debt in the funding mix, and
(PS/{E+D+PS}) is the proportion of preferred stock in the funding mix.
The key to computing the WACC is to determine Ke, Kd, and Kps. If there is no preferred stock, so the computation
of the WACC simplifies to:
1
This is the after-tax cost because interest is tax deductible.
128 129
Appendix 'B' - Ethics versus business ethics. Appendix 'C' Novartis Case study: Leprosy Eradication.
Peter F. Drucker provides the following insights in his book 'Management: Tasks, Responsibilities, Practices' on Novartis was looking for a strategic CSR program that went beyond product donation an approach the
the matter of 'business ethics', a topical subject today: company had already employed a number of times. Novartis now wanted to use its full range of core
Countless sermons have been preached and printed on the ethics of business or the ethics of the businessman. competencies to deliver and sustain a substantial impact on a key public health problem.
Most have nothing to do with business and little to do with ethics.
One main topic is plain, everyday honesty. Businessmen, we are told solemnly, should not cheat, steal, lie, bribe, After careful consideration, Novartis focused on leprosy because it provided an opportunity for the company to
or take bribes. But nor should anyone else. Men and women do not acquire exemption from ordinary rules of use its expertise in multi-drug therapy (MDT) to treat the disease. Focusing on leprosy also provided the
personal behavior because of their work or job. Nor, however, do they cease to be human beings when opportunity to target a public health problem that presented a significant challenge to government health
appointed vice-president, city manager, or college dean. And there has always been a number of people who authorities. As a first step, Novartis decided to donate its MDT to the Global Alliance for Leprosy Elimination.
cheat, steal, lie, bribe, or take bribes. The problem is one of moral values and moral education, of the individual, Next, Novartis searched for partners to help it develop and implement a leprosy eradication project. Since WHO
of the family, of the school. But there neither is a separate ethics of business, nor is one needed. was a key player in the Global Alliance for Leprosy Elimination, Novartis approached the agency to explore
partnership opportunities. Novartis soon discovered that WHO's perception of how it could work with
pharmaceutical companies was limited to product donations. Novartis says it took a serious effort to change
WHO's perception and create an expanded role for itself in the alliance, which included treatment, education,
and a focus on the effects of stigmatization. Because Novartis understood that stigmatization was a major
obstacle preventing people from coming forward for education and treatment, the company wanted to address
it in a significant way. In India, for example, Novartis funded local NGOs who used drama and the popular
Indian medium of soap opera to transmit key messages about leprosy and stigmatization.
Novartis also used the leprosy program as a platform to further develop community-based health
infrastructures. The company funded the development of local health clinics and the training of medical
personnel to provide leprosy treatment, along with care for other health problems as well.
Novartis medical staff worked with WHO to provide technical advice to these clinics on leprosy treatment.
One of the major reasons that pharmaceutical companies like Novartis get involved in high profile “signature”
projects is to build strong reputations and distinguish themselves in the eyes of the public. Novartis was
interested in the leprosy project not only because the company possessed a product that could benefit the many
people without access to treatment, but because it provided an opportunity to partner with WHO in a high-
profile, global disease-eradication program. According to Novartis, its role in the project allowed it to have a
significant impact on reducing leprosy while improving its reputation, goodwill, and organisational learning.
Novartis acknowledged that external pressure also played a role in its decision to get involved in the leprosy
project. Public health organisations, NGOs, and governments (particularly from the developing world) are
placing pressure on pharmaceutical companies to find ways to make their products affordable and accessible to
poor people living in the developing world.
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While several of the pharmaceutical companies focus on the importance of reputation, Novartis saw important Appendix 'D' - Sample innovations identified by National Innovation Foundation
business benefits from its involvement as well. The company believes that working with reputable public-sector
partners, such as WHO and the CDC, can help it develop the knowledge and skills it needs to successfully
Human Healthcare
conduct business in the future. These partnerships will help Novartis learn how to operate in difficult regulatory
environments and develop business practices and policies to make the company more competitive.
Treatment for Diabetes and Wound healing
Novartis also believes it will gain a better understanding of potential new markets in the developing world by
Doob Grass is available all over India. It has many medicinal values and can be used against diabetes, to stop
having its managers and researchers involved in partnerships with international health organisations. Through
blood flow from wounds etc.
these relationships, they gain a better perspective on consumer needs, service and distribution relationships,
ideas for new market opportunities, and new product development.
Diabetes: The diabetes patient need to consume a solution consisting of doob grass. This practice has reportedly
controlled 65% diabetic patients.
Wound healing: Doob Grass could be used as bandage. It is very powerful and less expensive than common
bandages.
Treatment for Malaria:
'Chirota' seeds (Andrographis paniculata) given to a patient suffering from malaria. If this is taken twice or thrice
everyday, the patient is expected to be free from malaria. The claims would need to be scientifically validated
and NIF is likely to enter into an agreement with NBRI (National Botanical Research Institute) soon, on the
subject.
Treatment for pain
An oil that can cure inflammation in the joints, sprains, swellings and pain associated with arthritis has been
developed using Adhatoda vasica (leaves), Aloe vera (stem bark), Anethum sowa (seed), Calotropis gigantea
(leaves), camphor, Euphorbia sp., Erythrina indica (leaves) etc.
Treatment for herpes and mixed skin infection
This involves the use of Woodfordia floribunda in treatment of the skin wounds.
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2
Animal Healthcare Appendix 'E' - Clinical Trials Industry in India
Medicine for snakebite in cows India appears to be poised to emerge as a base for multi-centric clinical trials for new drug development by
international companies. Indigenous companies are also increasingly building in-house capacities in this
essential domain.
Lobelia nictinifolia is believed to neutralize the effect of poison from snake and scorpion bites. (Notably, Chinese
Amongst the other countries in Asia, India stands out with a great degree of prominence due to a variety of
herbal medicine employs lobelia radicans Thunb to treat snakebites and traumatic injuries)
reasons that may best be summarized as India's strengths, capabilities and potential as outlined below.
Treating foot and mouth disease of cattle

India Strengths, Capabilities, Potential
Trichosanthes cucumerina is used in treating the infected cattle. India's sterling strengths and ability to do provide a resource pool of international reckoning and may be best
summarized as follows;
Expulsion of placenta in animal
Cost advantage - An in-house Rabo India report pegs the expenses in India as less than 50% for
The mixture of Mahuda leaves and paddy could if fed to animal as medicine or as food would assure that the Phase 1 studies and less than 60% for phase 2 and 3 studies as compared to the US.??
placenta gets detached within one hour and the animal would get rid of wastes from uterus. Pool of highly skilled and well trained doctors, investigators, and medical personnel which
contributes to speedier drug development time.
Livestock Management: Treatment for cure for diarrhoea, conjunctivitis and other ailments of Enormous pool of treatment naïve patients who are willing to participate in clinical studies
livestock Large geographical coverage; potential for multi patient recruitment at major cities across the
country
Diarrhoea: Juice extracted from bark of 'asitro' (Bauhinia racemosa).

Presently, over 80 government & privately owned Indian hospitals are engaged in global clinical trials. It is
estimated that this figure will grow exponentially by 2005; this time will also herald the beginning of an era where
Conjunctivitis: Bark of 'ingoriao' (Balanites roxburghii) applied topically over the eyelid.
product patents will come into play, generating a time of greater harmony with global norms.
Arthritis: Roots of 'shatavari' (Asparagus spp.) are fed. Areas that need to be strengthened further for the development of the Clinical Trials industry in
India
Anestrus in Cattle: 'Bhilama' seeds (Semecarpus anacardium) mixed with cattle feed and given to affected animals.
Medical infrastructure
Time lag for obtaining regulatory approvals
A large network of global companies are now looking at India as a potential center of knowledge, skill, and
resource base, to synergies capabilities and create a scenario for global research & trials to be conducted in a
country that is well equipped with the necessary requirements.
2
1. Report on Global Clinical Trials in India 'Challenges and Opportunities' by Dr. Dananjay Bakhle, Director, Medical Research and
Regulatory Affairs, Aventis Pharma Ltd. 2. CII's Background paper 'Conference on Clinical Research: Road map for India
134 135
Appendix 'F' Social activities currently undertaken by pharmaceutical companies Determine HIV Rapid Test Donation Program
This appendix describes various social initiatives undertaken by pharmaceutical companies in India. These have Abbott has committed to donate up to 20 million rapid HIV tests over five years to programs in Africa and the
been reproduced verbatim from reports and websites of these companies and from other relevant websites. poorest countries of the world to address the prevention of mother-to-child transmission of HIV.
ABBOTT LABORATORIES Product Donations
Global Citizenship Abbott provides pharmaceutical, nutritional and hospital products to humanitarian programs, disaster relief and
medical missions around the world.
Global citizenship reflects how a company advances its business objectives; engages its stakeholders; implements
its policies; applies its social investment and philanthropy; and exercises its influence to make productive Academic and Enrichment Programs
contributions to society. At Abbott, global citizenship also means thoughtfully balancing financial, environmental
and social responsibilities with providing quality health care worldwide. Our programs include public education; Abbott supports numerous science, math, technical and environmental programs for students in kindergarten
environment, health and safety; and access to health care. These efforts reflect an engagement and partnership through post-graduate school.
with stakeholders in the pursuit of sustainable solutions to challenges facing the global community.
Community Involvement
The Abbott Laboratories Fund (an Illinois not-for-profit, philanthropic corporation established by Abbott
Laboratories) contributes millions of dollars annually to health and human service organisations, education,
Abbott, its employees and retirees support health and human resource organisations in the communities they
culture, art, civic and public policy around the world. Priority is given to organisations that serve Abbott
live and work, both through volunteerism and financial contributions including grant support through the
communities; enhance science education; promote diversity; support environmental stewardship; and provide
Abbott Laboratories Fund.
access to health care for people in need.
Abbott and the Abbott Laboratories Fund are committed to improving people's lives throughout the world ASSOCIATED CAPSULES GROUP
through a number of initiatives and programs, including:
Associated Capsules Group (ACG) views social commitment as an essential activity for any organisation. We
Abbott's Global Care Initiatives realise the importance of a symbiotic relationship between companies and communities. Our vision
encompasses social welfare schemes and development projects to improve living standards in surrounding
villages.
Abbott Access
With this in mind, Universal Capsules Limited (UCL), an Associated Capsules Group company has adopted
many villages and developed them into models for its regions. Headed by a social care committee that includes
This program provides Abbott's HIV medicines at a loss and rapid tests at no profit in the poorest countries of the world.
residents as well as company representatives, the company provides support systems for drinking water
facilities; medical care facilities, education systems and hygiene.
Step Forward … for the world's children
The company conducts medical camps with the help of Indian Medical Association, distributing medicines,
providing bore-wells for drinking water, building crossover bridges and by establishing science laboratories in
Through the Step Forward program, Abbott and the Abbott Laboratories Fund focus on improving the lives of local schools.
orphans and vulnerable children affected by HIV/AIDS in Romania, India, Burkina Faso and Tanzania.
136 137
The employees' spouses have formed Capsulina Club, which organises regular social and welfare activities BECTON DICKINSON
among the community to form closer ties with local residents.
Becton Dickinson India Private Limited (BD - India), a part

We intend to expand our focus areas and carry out such long-term development projects in other areas, thereby of BD (Becton, Dickinson and Company), the global
connecting our communities in a broader social framework. medical technology company headquartered in New
Jersey, USA made a donation of its new BD SoloShot™ LX
ASTRAZENECA auto-disable syringe for BCG (Bacille Calmette Guérin)
vaccination against tuberculosis (TB) to the District
Immunization Officer of Rewari, Government of Haryana.
At AstraZeneca, we aim to be responsible members of our local communities through charitable donations,
sponsorships and other initiatives that make a positive difference. This means that in many different countries, in
many different ways, we are helping to bring benefit to the communities around us. Our community support BCG vaccination is usually given to newborn babies, but
initiatives are an important feature of our overall approach to Corporate Responsibility, which aims to ensure can also be given to older children and adults who are
that AstraZeneca continues to be welcomed as a valued member of society. Here are some of the key initiatives considered to be at risk of developing TB, where potential
undertaken by AstraZeneca in India in the year 2004. contact with the disease could occur or has occurred.
Initiatives undertaken in 2004 Mr. Edward J. Ludwig, Chairman, President and Chief
Executive Officer of BD, made this donation to district
Rewari, Haryana, which hosts the manufacturing plant of BD-India. With the efforts of BD, now the entire
Purchase dept contributed prize money of US$ 250/- to Sumangali Seva Ashrama organisation
immunization program in the village will be conducted with auto-disable syringes.
Medicines donated to various NGO's for Health Camps i.e. Ramakrishna Mission, Karunashraya,
CUPA, Art of Living Foundation, Mount Carmel College
Auto-disable injection devices are specifically designed to prevent the reuse of needles and syringes. Reuse of
Hemophiliacs Society fundraising
these devices has been identified as a significant factor in the spread of infectious disease in India.
Contributed to the "Jagruti" awareness program, for the Hemophilia society - Bangalore Chapter.
Our humble donation supported, encouraged and helped overcome the challenges which
Speaking on the occasion, Mr. Ludwig said, "In 1989, we made a long-term commitment to serve the healthcare
hemophilia places on patients & families
market in India. We reinforced this commitment in 1996 with the opening of our manufacturing facility in
Supported the Polio camp run by the Rotary, Bangalore Mahalakshmi branch. Haryana and in setting up a Clinical Marketing organisation for promoting best medical practices in India.”
Contributed to the Gururao Deshpande Sangeet Sabha music program
Computers donated to St. Josephs of Tarbes orphanage "BD has been a pioneer in promoting safe injection for over 15 years,” Mr. Ludwig added. “The support to
Sponsored disease awareness programs on World TB Day on TV Rewari's immunization program reaffirms our commitment and is a positive step in line with our corporate
Collection drive of old clothes for Women's Day for Sumangali Seva Ashrama purpose of helping all people live healthy lives."
Donated AZ Water dispensers to needy hospitals

Contributed towards the National Sadguru Gnananda Awards for Women in Social Work - A The basic objective of adopting Rewari two years back was to promote to adopt auto-disable syringes and safe
"Woman Social Work Crusader", who has dedicated her life to provide care, love & shelter to the injection practicesto eliminate the spread of injection related infections caused by device reuse. The program began
distressed & disabled with education and training to healthcare workers on injection safety. Over a period of two years, BD has donated
safety boxes and over 300,000 auto-disable syringes to facilitate the immunization program in District Rewari.
138 139
BD-India is already very active on issues such as promotion of safe injection practices, infection control for workers will immunize women of child bearing age with three rounds of tetanus toxoid vaccine. providing
healthcare workers and patient safety. Internationally, BD has various philanthropic partnerships and other approximately fifteen years of protection against tetanus.
economically sustainable relationships focused on global health issues including HIV/AIDS, maternal and “BD is committed to helping all people live healthy lives,” said BD president and CEO Ed Ludwig. “We are
neonatal tetanus (MNT), diabetes and measles. proud to have been an early champion of the MNT cause and look forward to doing even more in the future.”
Recently, BD and Hindustan Latex Ltd (HLL), a Government of India enterprise entered into an agreement that
will form the basis of a collaboration to help prevent the reuse of syringes in India through the introduction of
DABUR
auto-disable syringes, education and training of healthcare workers, and the implementation of advocacy
programs with the Government of India.
When our Founder Dr. S. K. Burman first established Dabur, he had a vision that saw beyond the profit motive.
In his words, "What is that life worth which cannot bring comfort to others." This ideal of a humane and equitable
BD donates approximately 55 million syringes to UNICEF-led campaign to eliminate MNT society led to initiatives taken to give back some part of what Dabur has gained from the community.
Recently BD donated approximately 55 million syringes to the UNICEF-led campaign to eliminate maternal and Our major initiatives in the Social sector include :
neonatal tetanus (MNT). The syringes will support the campaign to eliminate MNT as a worldwide problem by
Establishment of the Sustainable Development Society, or Sundesh, in 1993 - a non-profit
2005. Thus far, BD has donated a total of $8 million in cash and product to the MNT program.
organisation to promote research and welfare activities in rural areas;
Promoting health and hygiene amongst the underpriviledged through the Chunni Lal Medical Trust;
The global plan calls for safe immunization of more than 100 million women worldwide. BD auto-disable
and
syringes and injection products: The BD UniJect™ and BD SoloShot™ and BD SoloShot™ FX are being used to
safely deliver tetanus toxoid vaccine and to eliminate the risk of infection through reuse - an unsafe practice still Organising the Plant for Life programme for schoolchildren - to create environmental awareness
common in many nations. The first BD auto-disable syringe was designed for immunization and developed amongst young minds.
according to World Health organisation (WHO) specifications.
Dabur upholds the tradition
BD helped launch the MNT partnership in 1998 with an initial donation of cash and product. Recently, The Bill
and Melinda Gates Foundation joined BD as a major contributor in this effort to immunize women and protect Today, we at Dabur also value nature's bounty. Without the fruits of nature, the vision of Dabur would never
mothers and newborns. In addition to UNICEF, the US FUND for UNICEF, BD and the Gates Foundation, other have been fulfilled. And that is the reason for our unfailing commitment to ecological conservation and
members of the MNT Partnership include: the World Health organisation, PATH Program for Appropriate regeneration. We would like to follow the principles of our ancient texts, which say :
Technology in Health), the United Nations Population Fund and Biofarma, an Indonesian vaccine
"Dehi me dadami te" - "you give me, and I give you".
manufacturer.
Back to Nature
"BD's latest donation provides a major boost toward our goal of eliminating tetanus as a global public health
problem and improving the lives of women and children in very tangible ways," said Charles J. Lyons, president
Rare herbs and medicinal plants are our most valuable resource, from which all our products are derived. Due to
of the US Fund for UNICEF.
overexploitation of these resources and unsustainable practices, these plants and herbs are fast reaching the
point of extinction. In view of this critical situation, Dabur has initiated some significant programmes for
The aim of the MNT initiative is to raise $100 million to immunize 100 million. Through the partnership, a low-
ecological regeneration and protection of endangered plant species.
cost tetanus program for immunization and health education is being implemented in 57 countries including
India, China, Bangladesh, Ethiopia and Ghana. The response to this public health problem began with the
global identification of communities at risk. These are often hard to reach destinations, where local health
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Plants for Life GERMAN REMEDIES

Environment Conscious
We have set up the "Plants for Life" project in the mountainous regions of the Himalayas. Under the project, a
high-tech greenhouse facility has been set up for developing saplings of rare and endangered medicinal plants. At German Remedies, environment consciousness happens very naturally. The company cares for the
Fully computer-controlled and monitored, this greenhouse maintains the highly critical environmental environment and takes adequate measures to protect it. Due importance is given by the Company for proper
parameters required for their survival. We are also developing quality saplings of more than 20 herbs, 8 of them compliance with the prescribed industrial safety, environmental protection, and pollution control regulations at
endangered, through micro propagation. all its production plants, through periodic checks of the systems involved, and constant monitoring, to meet the
In addition, satellite nurseries spread across mountain villages and contract cultivation of medicinal herbs helps standards set by the Pollution Control Authorities.
in maintaining the ecological balance. These measures have also helped provide local cultivators the scientific
knowledge for harvesting herbs and a steady source of income. So that they are not forced to exploit the
Goa - is nature's paradise. Its valuable natural resources and scenic beauty has enthralled people for
environment to earn a livelihood.
generations. While serving the industry, the company is but a part of the noble profession of medicine. The area
around the German Remedies factory at Kundaim-Goa, has a beautifully maintained garden, together with an
Living a Green Heritage equally dedicated team of people who work towards maintaining it, speaks volumes about German Remedies
philosophy of life.
These are significant steps that can contribute to a better world for coming generations. To whom we would like
to bequeath a world not bereft of nature. But full of flowering and fruit bearing trees, animals, birds and humans Meeting Environmental Obligations - The Banyan Tree
living in good health and complete harmony.
If one visited the Kundaim plateau ten years back, one would have seen a majestic banyan tree in the rocky
Sundesh terrain dwarfing the neighbouring trees. The banyan tree was the shelter to many insects, birds and animals as
also to shepherds who rested under its cool shade as their cattle grazed lazily on the luscious grass. Today, an
The company has set up Sundesh-a welfare organisation financially and managerially supported by Dabur and ultra-modern plant of international standards has replaced the rocks and the other trees, however, the Banyan
Chunni Lal Medical Trust- committed to improving the health standards of the people. Tree continuous to be in its splendid form. The design of the Agiolax Plant at Goa was specially modified to
retain this great tree. An effort by all at German Remedies, a conscious attempt to preserve nature and the
outcome... a structure so Redesigned to serve a noble purpose. This tree remains as a symbol of company's
The company through these organisations provides healthcare facilities to women and children, gives non
concern for its environment.
formal education to children and adults and train people in vocations such as bee keeping, tailoring, mushroom
German Remedies concern not only reaches out in maintaining its surrounding areas but also in maintaining a
farming etc. to provide them additional source of income.
beautiful garden within the premises of the famous shrine the Basilica of Bom Jesus World Heritage Church at old
Education
Goa. The company took this opportunity to utilise its efforts in preserving Mother Nature. The idea took shape
when Mr. M. Knoll, Managing Director, German Remedies Limited, visited the shrine in 1993. Now, this small stretch
Non Formal Education - Dabur India provides education to those children in the age group of 6-14 years who has grown into a beautiful lush green abode. This is just another milestone in the direction of conserving nature.
are either drop outs or they had not been to the school.
Eco-friendly Plants
Remedial Education - To provide coaching classes for the school going children who are weak in studies and
nobodyin the family assists them in studies.
German Remedies manufactures Oral Contraceptives for the Indian market at its Andheri plant, Mumbai. This
plant is equipped with an energy intensive Air Handling system. This system makes the plant Eco-friendly. Due
Adult Literacy - Illiterate women in the age group of 15 to 35 years get education which is useful in day to day life.
142 143
to the high potency of oral contraceptive hormones, the entire air inside the plant is filtered through filters fine 180 ton capacity for conversion from CFC to HCFC 22 (R123) gas at a cost of USD 76000/- at the
enough to eliminate all traces of hormones and only then it is released to the environment outside. The airflow is Ethicon suture finishing plant at Aurangabad.
so designed that none of it can escape outside bypassing the filteration process. These features were added to
the plant in May 1996 under the guidance of its collaborators M/s. SCHERING AG. The company's dedication to protecting the environment is evident, given that the Montreal Protocol
The Oncology plant at Goa was set-up with the help of the collaborators ASTA Medica. All the operations inside does not require third world countries to phase out CFCs until the year 2010.
are done in close condition to ensure almost zero contact with the skin.
Waste Water Management

Further the air inside the plant is so circulated that no air can flow outside without passing through fine filters to
eliminate all traces of drugs suspended in the air. Further, the effluent from the plant is pre-treated chemically to
J&J Ltd. has ten manufacturing facilities, eight of which use water in process. All process waste water is
make it safe for the environment before sending it to the Effluent Treatment Plant. These are some of the
treated through Effluent Treatment Plants before it is discharged, to meet permit limits of BOD and
important features of the plant that makes it environment friendly.
COD. Also the treated water is recycled for gardening. Facilities that use water for steam heating, recycle
the water for steam generation in a continuous loop.
JOHNSON & JOHNSON
Energy Reduction
At the international level, Johnson & Johnson (USA) works with
the community around, that is, the surrounding environment. In
J&J Ltd. reduced its rate of energy consumption by 6% in 1996, over the base year 1991. This translates
Asia Pacific through the Asian Contribution Committee, which is
to a saving of 17500 mmbtu or 1523000 KWH and a cost saving of approximately USD 127,000/-. The
a part of the Corporate Contribution Committee (world), the
company conducts regular energy audits through professional agencies, based on which they
company focuses on children and women in the community.
implement energy saving measures. These include improvements in process efficiencies,
process/technology upgrading, alternative energy sources and continuous tracking/monitoring.
In India, business heads from various departments of the company implement Corporate Social Responsibility
We have stretched our Energy Reduction Goal to 15%
and meet regularly to discuss projects and organisations to partner with. Johnson & Johnson started community
development initiatives in India in 1996-97 by funding CHILDLINE India Foundation, 24 hour free phone
service for children especially the street children. Packaging Reduction
Some of the projects taken up by the company are :- In order to conserve natural resources and save on cost, we have reduced packaging consumption
through measures such as container weight reduction, shipping unit weight reduction, elimination of
leaflets/cartons/ shelf units, pack/container redesign, etc. Thus, over the base year 1992, we have
Elimination of CFCs
achieved a reduction of 7%, or approximately 1200
metric tons. Having achieved this reduction, we have now
In December 1995, J&J Ltd. became the first company in India to successfully eliminate CFCs from its set a revised goal of a cumulative 14% reduction by the
manufacturing operations. This required the company to modify the sterilization processes at its Ethicon year 2000.
suture finishing plant at Aurangabad.
Thereafter, J&J Ltd. eliminated CFCs from all air conditioning and refrigeration equipment whose
capacity was greater than 5 tons. This necessitated retrofitting three air conditioning/chilling plants of
144 145
Soil Conservation LUPIN
J&J Ltd. actively sponsors and participates in tree planting drives. In addition, we have more than 1200 At the core of Lupin's enterprise is the commitment to the welfare of the communities in which we live and
trees on our premises. We have also developed and maintain two public gardens in Mumbai. conduct business.
AIDS Awareness Our responsibility is reflected in our investments in providing life saving drugs, health outreach and community
development programs and award winning programs in environment and safety management.
Johnson & Johnson has publicised the AIDS awareness programme conducted by International Health
Organisation (IHO) The Lupin Human Welfare and Research Foundation (LHWRF) is committed to rural reconstruction. The
It also funded the Wadia Hospital's diagnosis test for AIDS, undertaken for the women coming from the program reaches out to more than 1919 villages in eleven districts of four states covering nearly 1.45 million
lower economic strata of the society. people in India. It won the Businessworld FICCI-SEDF Corporate Social Responsibility Award in 2003.
LHWRF's focus: infrastructure, rural industry, agriculture, animal husbandry, health and sanitation, and
education and social welfare.
Health
Lupin Human Welfare and Research Foundation (LHWRF)

Johnson & Johnson has funded the Burns Chembur Hospital Project Trust (CHPT), formed to provide
immediate medical treatment to burns and trauma cases.
On 2 October 1988, Mahatma Gandhi's birthday, Lupin Chairman Dr Desh Bandhu Gupta founded the Lupin
Human Welfare and Research Foundation (LHWRF). Its brief to provide an alternative, sustainable and
Vocational Training
replicable model of rural development.
Johnson & Johnson has collaborated with Pathways to support the organisation in imparting vocational
A program that began modestly with 35 villages has succeeded in revitalizing more than 1919 villages in 11
training to disabled children in Chennai.
districts in Rajasthan, Madhya Pradesh, Maharashtra and Uttar Pradesh to become one of the largest NGOs in
India.
Johnson & Johnson's contribution to the society is based on its CREDO - the guidelines followed by each and
every staff of the company in their day to day work, in which it is mentioned that each employee must care for
For every rupee spent by Lupin, LHWRF's efforts have attracted more than Rs.9 of contribution from other
the children, women, patients - in short the members of the society. In future, it plans to carry out programmes,
agencies and individuals. India's central and state governments, the UN, and other international voluntary
such as, workshops on Management Training in Hospital Administration in public and private hospitals. In
agencies have appreciated the LHWRF's grassroots work.
1998 and 2000, Johnson & Johnson undertook patient education on Diabetes at Chennai through an
exhibition, wherein more than three lakh people attended.
Health Outreach
As one of the world's largest manufacturers of life-saving drugs, Lupin is fully aware of its responsibility towards
the community that it lives in and serves. Our health outreach program primarily seeks to educate communities,
particularly the vulnerable poor and illiterate, on the scourge of tuberculosis, its prevention, containment, and,
more important, its cure. Some of Lupin's contributions to the fight against this killer disease:
146 147
A 20-minute film on the symptoms that could indicate TB, its treatment and its cure. We screened the This disability care work has accompanied the CLCP's role in the provision of MDT services. CLCP introduced
film all over India at the clinics of nearly 5,000 leading TB-specialists the MDT blister packs in India, in Goa as early as 1991. The prevalence rate of leprosy in Goa has dropped
100 TB camps across India in 2002-03, where Lupin sponsored patient diagnosis with sputum testing significantly, from 10 to 3.6 per 10,000 in the 9 years to 2000, while the quality of life for those disabled by the
and X-rays. Public awareness was created through extensive campaigning with the local communities- disease has been immeasurably improved. CLCP has been expanded to 15 districts in Gujarat, and to other
up to 200 people turned up for single camps in the Indian state of Uttar Pradesh. Our film on TB was Indian states like Goa, where it has also been highly successful. The CLCP now serves as a model for other
shown at all these camps countries like Sri Lanka in its provision of field based disability care services.
Almost every TB-treating doctor has educational posters, created by Lupin, in patients' waiting rooms
In December, Lupin would be distributing post-it notes on patient education to be handed over by Introduction
doctors to patients suffering from TB
Patient education literature in 9 different Indian languages The Comprehensive Leprosy Care Project (CLCP) was established in 1989.The first project areas were in the
state of Gujarat on the west coast of India.
NOVARTIS The CLCP aims to provide holistic care to all persons affected by leprosy. This means supplying MDT treatment
for the disease as well as the prevention, correction or care of disabilities occurring at any stage. The CLCP has
pioneered the methods of providing these comprehensive services at the village level through the existing
The best way to prevent disabilities is early recognition of leprosy, and treatment with MDT. However if early
network of government health care staff.
disabilities are recognized in time, and correctly managed, they can be corrected. For example the prompt and
correct management of leprosy reactions with cortico-steroids can limit nerve damage. Physical rehabilitation
aids, such as pre-fabricated finger and foot splints and reconstructive surgery can help to arrest or even correct The CLCP approach
disabilities caused by leprosy.

Extensive education about leprosy and the early detection and treatment of patients with multidrug therapy
In India, the Foundation's Comprehensive Leprosy Care Project (CLCP) in close collaboration with the state have protected millions of people suffering from leprosy from developing disabilities. They have also succeeded
health ministry, has pioneered the provision of field based disability care services. As well as offering MDT in reducing the social prejudice against leprosy sufferers, including those with disabilities, which in the past has
treatment, the government network of health staff were specially trained in the recognition and management of led to some of them being rejected by their families and forced to beg on the streets. Nonetheless, as such people
disabilities in order to facilitate the physical, economic and social rehabilitation of patients. often need care, CLCP has aimed to provide treatment and disability care services to them as close to their
homes as possible. The CLCP project approach can be summarized as follows:
Empowerment of the patients is the core of this approach. For example, they learn in self-help clinics how they
themselves can treat their ulcers and prevent their recurrence. In a similar way, patients are trained in how to use Ensure easy and uninterrupted access to MDT services (diagnosis and treatment).
pre-fabricated splints and to exercise the affected fingers. The Modulan made-to-measure grip aids help them Develop innovative and pragmatic approaches to prevent, correct and care for leprosy related
perform essential everyday tasks, and the project has also planned with patients the provision of suitable disabilities at the grassroots level.
equipment that enables them to work. The degree of self-dependence they have achieved through these means Simplify the “disability care package” to facilitate its incorporation as a core component of leprosy
has played a vital role in their rehabilitation. elimination programmes.
CLCP has pioneered the integration of disability care along with treatment at the village level through existing Standardize data collection in order to understand the scale of the disability load in a community for
government structures. These activities also demonstrate that after suitable training and motivation, the leprosy planning and implementation.
staff are willing to and capable of providing disability care services. This has also proved to be highly motivating
Put into place a simple and effective monitoring system (including the development of specialized
for workers as they contribute significantly to improving the quality of patients' lives. Moreover patients now
software), in order to track services provided, as well as their impact.
have access to urgently needed services in their own vicinity.
Train leprosy workers and provide them with the skills and materials to carry out the tasks assigned to them.
148 149
Appendices
Involve patients' families and communities in the program in order to promote a sense of local
ownership.
Provide specialized services (e.g. reconstructive surgery) where necessary.
Design, develop, produce and supply physical aids and appliances free of cost (e.g. self care kits, splints,
Modulan® grip-aids, footwear, educational materials etc.)
Supply economic assistance as part of community-based rehabilitation services to needy patients.
Continue to look for ways to improve the components of the “package” and their impact.
Services rendered and results
In CLCP's first target area, the Borsad taluka (or sub- district) in the north of Gujarat state, increased leprosy case
detection and the introduction of MDT treatment led to a drop in the prevalence rate from 8.9 persons per 10000
at the start of the project to 0.67 10 years later in 2000. Through the disability care network with its educational,
physical and economic rehabilitation and equipment provision components (detailed in the previous section),
nearly 700 patients were provided with disability services.
After this success, the disability care project was extended to 4 larger, district-level areas in the north of Gujarat
state with a low incidence of leprosy (Gandhinagar, Mehsana, Banaskantha and Sabarkantha). Here, the
project also met with an excellent response. To give an idea of the treatment received by patients in these
districts, 81% received training on how to care for desensitized or numb extremities, 64% were equipped with
hand splints and 14% with modulan® grip-aids for their hands. 73% got
the special microcellular rubber (MCR) footwear and 7% participated in
the economic rehabilitation program. The latter had particularly pleasing
results, as a survey a year after the program's completion found that over
90% of the participants were earning incomes well over subsistence
levels.
CLCP was next extended to the high endemic district of Panchmahal,

where in the year 2000 the disability rate stood at 6 persons per 10000 in
a population of approximately 3.5 million. Computer data from
Panchmahal offer more details of the patients and the nature of their
disabilities. Most of the patients were aged 16 to 60 with the largest
number in the 31 to 46 age group. Just under half had been registered in
the period following the introduction of MDT. The extent of the problem
150
of cases which had remained untreated for lengthy periods of time can be seen in the high number of disabilities In Panchmahal district for example, in the mid-1990s, as many as 8.8 % of newly detected cases had already
among newly detected cases. Of these disabled cases, over half (around 60%) had developed the more developed disabilities. This percentage is likely to remain high for some time, as more hidden cases are
advanced symptoms of the disease, classified by the World Health organisation as Grade 2. registered, while overall leprosy prevalence rates continue to fall.
It is in this environment, where there are substantial numbers of leprosy sufferers with disabilities that the CLCP
Under CLCP guidelines, the less advanced Grade 1 cases receive self-care instruction, eye care guidance and has pioneered the integration of disability training, care and rehabilitation services into the wider leprosy
MCR footwear. Grade 2 cases receive all these and in addition, the self-care kit, physiotherapy exercises, the elimination program. The project has provided a core of trained workers, who have gained in confidence and
appropriate hand and foot splints, manual aids, and where needed, reconstructive surgery. Both groups receive morale as they have undertaken a range of activities in addition to basic drug delivery. Their efforts have been
corticosteroid therapy if necessary and rehabilitation. extremely successful in promoting the idea of community rehabilitation of leprosy sufferers. This approach has
been a sharp contrast to practices before MDT, which favored the separation of leprosy patients from society and
their removal into so-called colonies. The work of the project has supported the state's public awareness
CLCP focused its efforts on improving the support, supervision and the maintenance of foot care supplies.
campaigns, emphasizing the curability of the disease and its non-infectivity after MDT treatment. By increasing
Criteria for the provision of MCR footwear were established for health care workers in the field, prioritizing those
the degree of self-dependence and self esteem among patients, the disability program is playing its part in the
patients with desensitized feet or feet with a tendency to ulcerate or crack. Well-based training has achieved
ongoing fight against the fear and ignorance often shown by local communities towards leprosy sufferers.
excellent results in the recognition by health workers of disabilities at an early stage, so that in foot drop cases for
example, the threat of further damage can be averted. All patients with foot disabilities receive CLCP
prefabricated foot splints, corticosteroid therapy and guidance in exercising to prevent further complications. The CLCP's disability services have been extended to many thousands of leprosy sufferers in its project areas of
Only ulcer care requires relatively specialist attention that is beyond the scope of the general health workers and Borsad taluka, the 4 districts of Gandhinagr, Sabarkantha, Banaskantha and Mehsana, and the high endemic
this is provided by physiotherapists from nearby hospitals. Their regular visits also serve to boost morale, district of Panchmahal. After patients have been monitored and the disability services have been satisfactorily
showing how disability services are being brought into the field. incorporated into local health services, CLCP has withdrawn. In the project district with the greatest disability
burden, Panchmahal, an assessment was undertaken among patients after 2 years of service delivery. It found
that of the 2623 patients receiving the various disability care services, 92% reported benefits from at least one.
CLCP has helped to organize the training programs, which are an essential part of continued success in the
Compliance with health care advice was assessed as 96%; MCR footwear compliance as 98%.Over 85% of
campaign against leprosy. These include the surgical training programs and the training of health workers at
Modulan® grip aid recipients reported benefits as did 75% of foot drop splint and 60% of hand splint recipients.
district level in early stage disability recognition and in the application of pre-operative splints. Broadening the
After project completion in an area, CLCP has sometimes, on request, been able to provide aids and appliances
base of those equipped to deal with leprosy cases is particularly important at a time when the state health service
to local health services. The Modulan ® grip aids have been extensively adopted by other organisations
has been reorganized with staff from the specialist or vertical service being reallocated. A skeleton staff of
involved in leprosy and helping victims of manual disability. These have included the Calcutta based
specialist leprosy workers has remained in the 6 high endemic districts in the state. General health workers have
Missionaries of Charity.
been trained in leprosy awareness and management by state level leprosy experts, while medical students in
colleges and traditional ayurvedic and homeopathic healers have been addressed on the subject in separate
seminars. The CLCP has also been extended to other areas of India such as Goa and has served as a model in Sri Lanka.
Impact The future
CLCP has contributed to the outstanding success of the state's elimination program, with early case detection The areas in Gujarat state where CLCP is currently offering services are the districts of Kheda, Ahmedabad,
and regular MDT treatment providing a complete cure for thousands of leprosy sufferers. Surat and Valsad. The challenge of the future lies in maintaining and improving the disability training and
Although prevalence rates continue to fall in Gujarat, a high proportion of the recent cases are still being detected management network at all levels, to meet the needs of the increased numbers of disabled leprosy sufferers that
with disabilities. This shows that the elimination program is contending with a considerable backlog of are expected, while the elimination campaign is intensified in the remaining high endemic areas. A useful
previously hidden cases where the disease has been left long enough without treatment to cause disabilities. addition to the existing structure is the referral center established by CLCP at Surat. This has improved access for
151 152
patients from the south of the state and allows easier PFIZER
implementation of the disability care program. CLCP's Leprosy
Management Training Centre in Mumbai, has put into place a Mobile Home Care Team
computerized record system, that has greatly facilitated the
planning, management and monitoring of the program. Pfizer has partnered with Cansupport to deliver palliative care and support to
persons living with advanced cancer.
ORGANON INDIA Pfizer has funded a home care team to care for atleast 30 patients, at an annual
cost of approximately Rs.13 lakhs. The team consists of a doctor, a nurse, a nursing
Organon India has announced a series of initiatives aimed at improving awareness in the country's contraceptive assistant, a counselor, an office assistant and a driver. Pfizer's contribution covers the
market. cost of salaries, the vehicle, homecare expenses, medicines, and overheads.
The Federation of Obstetrics and Gynaecological Societies of India (FOGSI), in association with Organon, has The mobile unit delivers palliative care services, free of cost, to cancer patients in the city of Delhi. They offer to
launched a post-graduate college program entitled Let's Talk. the patient relief from pain and other distressing symptoms, nursing care and advice, answers to enable them to
make informed choices The care provided does not concentrate on the disease but on the needs of the
The programintroduced to help boost India's slow trend in contraceptive behaviorwill cover a number of
individuals and their families.
colleges and will address 22,000 women over a one-year period.
Patients are referred to the home care service from the Institute Rotary Cancer Hospital at AIIMS, from
Dharamshila Cancer Institute, and from other hospitals, as well as by friends and relatives.
“The purpose of this program is to educate young women on the prudent use of contraception,” explained
Marie-Helene Piederiet, Organon India's head of marketing.
The home care team offers :
“Organon, along with FOGSI, hopes to encourage these

womenwho are on the verge of completing their professional Medical and nursing care to relieve the pain and distressing symptoms
education and entering marital lifeto prepare for the decision to that can accompany advanced cancer.
plan their parenthood.” An opportunity for the patient and the family to talk over issues that
may be troubling them with experienced and caring professionals.
Organon has also launched a toll-free contraception helpline to Practical advice and support to family members in their role as carers.
provide women with accurate and unbiased information on Medical equipment, supplies and nutritional supplements to those with special
contraception and reproductive health. needs.
Comfort and care that extends to all aspects of the individuals well being.
Added gynecologist Dr Duru Shah, who is president-elect of FOGSI: “Steps to strengthen the message and need Bereavement counseling to grieving relatives.
for contraception begin with awareness and education on the essential aspects of reproductive health, especially
among the youth of India.”
Cansupport is a Delhi based non-profit society that provides palliative care, free of cost, to people with advanced
cancer. It helps them and their families to make informed choices and to receive appropriate physical, emotional,
Headquartered in Mumbai, FOGSI is one of the largest bodies of medical professionals dedicated to women's social and spiritual support.
healthcare in India.
153 154
Palliative care is the term used for providing patients and their families a 8. Combat ignorance, superstition, and low level of literacy
way to control pain and relieve suffering. It includes medication, nursing especially among women, which compounds health
and counseling and while it neither prolongs life nor hastens death, it problems, feeding prejudices and harmful practices.
can help people cope with a difficult time in their lives. 9. Prevent the growing incidence and burden of Sexually
Transmitted Diseases.
Mother and Child Healthcare Program
Prince Charles visits Pfizer's Community Health Care
Partner : The Arpana Research & Charities Trust Project in Haryana
Pfizer adopts 35 villages in rural Haryana for a Primary Healthcare Program. During his recent visit to India in October 2003, His Royal Highness, the Prince of Wales visited Kutail Gamri
village, one of the 35 villages adopted by Pfizer for the Mother & Child Primary HealthCare Community based
program in rural Haryana.
Pfizer has been supporting the Arpana Research & Charities Trust, in rural Haryana, since June 2002, for a
three-year term, with the objective of conducting an effective Mother and Child Primary Health Care initiative to
reduce anaemia in pregnant women and adolescent girls. Prince Charles, walked through the streets of the village, visited
several houses and interacted with a number of people, including
women and children. The prince also met the village's 20
The project covers 35 villages in and around Karnal district, Haryana, and a
midwives and saw how the Arpana Trust was working with locals
population of approximately 60,000 persons.
to educate them in skills such as midwifery.
¨ The program targets the reduction of anaemia in pregnant women,
adolescent girls, and those with diseases linked to anaemia.
Naee Nigah Program
¨ It provides services for women and girls (including reproductive health
care and care of adolescent girls) and child care services.
In association with HelpAge India, Pfizer created awareness of the cataract problem, conducted 7,500 free Intra-
¨ It also promotes community health covering diarrhoea management, antenatal
Ocular Implant surgeries and provided most operative care in 10 states across India.
care, child nutrition, immunisation etc.
Rebuilding Hope in Bhuj

Highlights of the Pfizer- Arpana Partnership
1. Reduction in child and maternal mortality
Pfizer has supported the restoration of the health of earthquake affected persons through building a
2. Better all round healthcare and awareness of health needs of pregnant
multipurpose hospital in Bhuj, Gujarat. The hospital which is now
women and children less than five years.
fully operational has:-
3. Smaller families that would ensure better living standards.
1. Geriatric ward
4. Growth of community based institutions that will initiate and take
2. Ophthalmic ward
responsibility for healthcare and other development needs of the community.
3. Pathology section
5. Focused attention to reducing the incidence of anaemia.
4. Physiotherapy
6. Alleviation of malnutrition.
5. Trauma counseling
7. Control of preventable diseases (e.g. diarrhoea, malaria), especially in women and & children.
155 156
6. Ophthalmic operation theatre Multiple Sclerosis Society
7. Operation theatre
8. Medical Mobile Van Pfizer supports and works closely with the Multiple Sclerosis Society of India .
The hospital is designed to cater to an approximate population of Pfizer provides financial assistance, product donations in the form of vitamin supplements, as well as
one lakh spread over 34 villages in Bhuj taluka. organisational assistance to MSSI.
Pfizer supported the 2nd Multiple Sclerosis (MS) Walk held at the Mahalaxmi Race Course, Mumbai on
Sabera Girls Home
February 7, 2004 . This MS Walk was held to create awareness about the disease in India and to raise money for
MSSI to aid and assist MS patients. For each person who took part in the MS Walk, Pfizer India pledged Rs. 500/-
The Sabera Girls Home keeps children from poverty-stricken backgrounds, who have been rescued from the
to the MSSI.
streets. These children are provided them with food, shelter and formal education. Sabera also conducts
vocational therapy through music, dance, sewing etc.
The Walk was an outstanding success. Hundreds of people 'walked' the length of the racecourse in order to raise
funds to carry out the work for patients with Multiple Sclerosis.
Currently, there are 160 children in the age group of 6 months to 16 years who live with Sabera. These children
In a spontaneous display of support and solidarity to this noble cause, Pfizerites from all corners of Mumbai left
have been rescued from dire straits, from destitution and from terrible diseases.
the cozy comforts of their homes on a Saturday morning, and gathered at the race course.
Today, they have a home that caters to their needs, that gives them a bed to sleep in, 3 meals a day and a formal
Bombay Leprosy Project
education. They also have vocational therapy through music and dance classes, yoga. The children are taught
computer skills, sewing etc. The girls are given the opportunities that all middle class Indians take for granted.
Pfizer supports the treatment of Leprosy patients
From here, they will move on to their new lives, a life of hope and ambition once they are qualified to do so.
Pfizer India is supporting the treatment cost of leprosy patients. Pfizer is working with the Bombay Leprosy
Project (BLP) who administers the medication to the patients.
Pfizer India supports the healthcare needs of these 160 children through the donation of Rs. 6
lakhs a year.
"BLP is one of the centres recognized by the government of India to receive and treat the leprosy patients with
Thalidomide. We are immensely grateful to Pfizer for this gesture of sponsoring the treatment of patients" said
Helping a child suffering from poverty and distress, in his/her journey of life by Padmashree, Dr. R. Ganapati, an eminent Leprologist and Director of the Bombay Leprosy Project
providing shelter, nutrition, education and healthcare along with love and care is acknowledging Pfizer's support.
the most beautiful way to show dignity to mankind. It will be a matter of pride for
us when these children grow up and become healthy and happy individuals.
Legacy of Service in the past
Sabera Foundation
Our contribution to relief work during calamities:
· 1st September 1993
Sabera Foundation promotes the social transformation of women by self-
¨ Pfizer India rushed antibiotics, vitamins and protein foods for the victims of the earthquake in Latur
empowering young girls. Their goal is to instill in girls the pride of independence,
and Osmanabad districts of Maharashtra.
knowledge and self-confidence; and to educate men and women in the girls'
¨ A second donation of drugs and protein foods was made to the Health Secretary of the Government
community to support them in this endeavour, assisting efforts to improve the community itself.
of Maharashtra.
157 158
Yet another contribution of medicines, through our Healthy baby competitions, deworming campaigns, sports
Manufacturing Unit at Ankleshwar, was made in tournaments, typing and tailoring coaching, art and drawing
response to the Gujarat FDA. competitions, vocational guidance for ladies, etc. are some of the
The value of these donations was Rs.200000. community initiatives taken by Pfizer India.
Pfizer Inc. offered 300000 vials of Unasyn IM/IV 750 Previously at our Plant at Ankleshwar, donations were made to the local
mg, a broad-spectrum antibiotic, and effective against hospital for the upgradation of its facilities. Pfizer also provided
bacteria. Pfizer New York also offered Terracortrial, recreational facilities to the employees at Ankleshwar within the
topical ointment, Vibramycin (useful in epidemics like Company's housing complex.
Cholera) and Bacacil (an oral broad-spectrum antibiotic. The value of these medicines exceeded
Rs.15 million ($500000). Pfizer India's encouragement to excellence and education
Pfizer India donated a sum of Rs.500000 to the Maharashtra Chief Minister's Earthquake Relief
Fund, in addition to the donation of medicines. Pfizer Scholarships for Employees' Children.
2nd September 1994
Pfizer India donated 1 million capsules of Oxytetracycline to the states most affected by the epidemic In a learning organisation such as Pfizer, it is only natural that the employees' children also have opportunities to
of plague, viz. Gujarat and Maharashtra. In addition, some quantity of streptomycin was also forge ahead in their academic pursuits.
airlifted from overseas locations of Pfizer.
Pfizer India launched a health education campaign on plague in the form of advertisements in the
Pfizer Philanthropy
vernacular press in all the affected states. We also provided posters and distributed handbills in
public hospitals and railway stations.
August 12, 1999: Pfizer Ltd. contributed Rs.11.25 lakhs to the Army Central Welfare Fund for the
Pfizer India set up a Medical Advisory Group in the affected centres where a panel of doctors offered
rehabilitation of the Kargil affected army personnel. This included a donation of one day's wages by the
appropriate medical advice to the public.
Company's employees. A cheque for this amount was handed over to Brig. Tej Krishen Kaul, Mumbai
3rd October 1996 Sub Area Commander of the Indian Army.
Pfizer India donated 7000 tablets of Vibazine 100 mg to the Regional Medical Research Centre,
Andaman & Nicobar Islands, for trials relating to the efficacy of the drug in reducing the mortality of
Pfizer donated Rs.20000 for the education of the disabled children at the Dayanand Nilayam Society for
leptospirosis.
Social Development, Kanigiri, and Andhra Pradesh. This Society, started in 1998, works for
handicapped and disabled children in Prakasam District of Andhra Pradesh. The Society helps polio
Pfizer India's community development activities affected children and provides them with educational facilities as also free food, clothes books and
At the manufacturing facilities located in our country, medicines. For the past ten years the Society has helped more than 300 children for surgery. Students
Pfizer tries to propagate goodwill with the neighbouring are also provided vocational training which enables them to become self reliant.
communities and alleviate their welfare through a
number of activities. Pfizer regularly provides Becosules capsules to the Multiple Sclerosis Society of India (MSSI). MSSI is a
The Thane plant in Maharashtra has adopted the nearby voluntary organisation whose mission is to minimize the devastating effects of Multiple Sclerosis on
Turbe school where it offers scholarships to a number of individuals and families. Every month workshops on diet and nutrition are conducted. The other essential
children who perform well in academics. service started is regular physiotherapy. There is a big requirement of vitamins, calcium, tonics, etc. The
They also conduct health camps in the surrounding region Company has contributed about 10,000 capsules of Becosules which were found to be very useful.
159 160
Alert India An association for leprosy education, rehabilitation and treatment. Though the overall PROCTER & GAMBLE
prevalence has declined, the incidence of new cases would take a long time before it starts declining.
Pfizer donated 50,000 capsules of Becosules which forms a part of the treatment along with appropriate
Procter & Gamble Hygiene and Health Care India, has launched PROJECT DRISHTI - the first ever
anti leprosy treatment.
Sight Restoration Corporate project undertaken in association with the National Association for the
Blind (NAB).
Pfizer had donated 25,000 capsules of Becosules in August 1998 for the flood affected victims in Deoria Project Drishti will attempt to restore sight to over 250 blind girls from across the country through corneal
district of the state of Uttar Pradesh in North India . transplant operations. This initiative, the first of its kind on such a scale for corneal transplantation for
adolescent girls in India is being supported by brand Whisper.
The Hunger Project. A wide ranging NGO in India , encompassing more than 1,000 villages across 11 Employees of P&G have also come forward to support the cause. The employees have pledged 700
states of the country that comprise 80% of the population. Pfizer sent 12,000 capsules of Becosules eyes and Rs. One lakh to the cause as a token of their ongoing support to this movement.
which were very useful for the flood affected people of Gorakhpur district in the state of Uttar Pradesh in
North India .
Approximately 3% of this Group can have sight restoration operations if only the donor eyes in requisite
number and monetary support were available. The plight of the blind woman is particularly sensitive
Indian Leprosy Foundation. A registered body had organized a Citizens' reach out programme to help with the male-female disparities of our society
patients of leprosy. Pfizer had donated 15,000 tablets of Isoniazid (100mg) which is an essential part of
the treatment . Across the world, Procter & Gamble has led the way for Corporate involvement to bring value to the lives of the
community. In India, the Company's contributions were recognized when in 1998, Procter & Gamble received
Aasara A registered body which tries to improve the lot of young children. Pfizer India contributed the Bombay Chamber of Commerce and Industry (BCCI) Civic award for Education, Health and Hygiene for its
Becosules capsules, cough syrup Corex and Protinex. P&G PEACE (Program for Environment Action and Conservation Education). The Company also has in place
P&G Future Focus-the first ever national, free career counseling helpline.
Pfizer provided antibiotics, B complex capsules & syrup, cough syrup, and anti amoebic drug to
Apnalaya, which is a non governmental voluntary organisation that has been working in community Project Drishti continues its mission
development, education and health in the slums of Mumbai for 25 years. Apnalaya has seven
community centres situated in slum areas and all these centres are involved in running a whole range of Maximum success has been achieved with south of India and the number of girls whose sight has been
activities for all the local communities. A major thrust of the work is in the field of health, especially restored reads as follows: Hyderabad - 35, Madras - 9, Madurai - 11 and Ahmedabad -11. In Mumbai 8
women's and children's health.
Procter & Gamble and UNICEF launch project 'Open Minds'

Help Age: Help Age India, a premier charity in India , established in 1978 with 23 offices nation - wide
endeavours to help the poor and destitute elderly with a holistic and integrated approach towards
Mumbai, October 21, '99: Procter & Gamble in association with UNICEF has announced the launch of
improving their quality of life.
'OPEN MINDS'-- a special program targeted to support and educate children across the Australia,
ASEAN and the India region.
Pfizer donated personal computers that will be used at the various offices of India for maintaining their
Across the region P&G targets to raise upto US$ 5 million over the next three years to help children
records and Direct Mail Appeal, which they send out to the donors. This is the most important activity
develop and grow to leverage their full potential.
through which they reach out to the public and inform them of the activities as also involve the public in
their cause.
161 162
In India, 'OPEN MINDS' will focus on bringing working children to school. For every large size pack of professionally managed, nonprofit, independent body 'Ranbaxy Community Health Care Society' (RCHS) was
Vicks Vaporub, Whisper, Ariel Power Compact, Head & Shoulders and Pantene purchased by established against the backdrop of full moral and financial support of the company.
consumers during November 1999 to January 2000, P&G on behalf of the consumer will contribute the
cost of one day's education of a working child to the 'OPEN MINDS' fund. The Company hopes to raise
Activities
a minimum of Rs 1 crore for 'OPEN MINDS' in India over the next three months.
A clinic is held in the selected villages or slum localities on once or twice a week basis. In addition, the ANM
According to UNICEF only 55% of the children of India complete primary education. About 60% of our
makes home visits to generate base line data through a family folder system with an aim to determine the true
schools are two teacher schools and about 15% of the schools are single teacher schools. "Across the
profile of the community and provide care to all and the greatest amount of care to those in greatest need.
region some 79 million girls aged 6-11 and 61 million boys do not go to primary school. In India the
picture is equally dismal. Every child outside school is a potential child laborer, deprived of his or her
The services provided are a blend of preventive, health promotive and curative services amply supported by
right for education and self-development. It is vital that we create conditions to facilitate access to
field laboratory and referral services covering areas of maternal child health, family planning, reproductive
education to every child, only this will ensure a better future for India in the coming years.
health including prevention and treatment of Reproductive Tract Infections (RTIs) / Sexually Transmitted
Diseases (STDs) and HIV / AIDS. The Society has installed a number of hand pumps in the dry zones of District
Procter & Gamble and UNICEF have launched OPEN MINDS to deliver the right to education to Dewas in Madhya Pradesh to improve the availability of safe drinking water. RCHS recognises the need to
children, particularly working children who are the most vulnerable in this country." empower the communities through access to information. RCHS firmly believes that Information, Education,
Communication (IEC) is the “mantra” that forms the basis of any meaningful healthcare programme. Thus,
The employees of Procter & Gamble will voluntarily contribute one day's salary towards the 'OPEN health education now forms the key component of RCHS programme.
MINDS' fund.
Impact of services
RANBAXY
RCHS is a need based and scientific intervention program. Several studies are conducted to gauge the problem
Introduction and then to gauge the impact of intervention/services provided. Relevant statistics are given below and they
amply speak about the favourable impact of the services rendered by the Society.
Ranbaxy has a strong element of Corporate Social Responsibility inscribed in its values and its concern for the
society extends well beyond its business motives. Participation in seminars
The company does not view success and achievements in terms of commercial gains only but firmly believes The Society shares its expertise and experiences with other public health professionals by way of presenting its
that corporate social responsibility is the key for providing a deep symbiotic relationship that exists between the scientific research study papers in important national and international conferences to focus attention on the
company and the environment it functions. Over two decades ago, in 1979, in the wake of grim health scenario emerging health issues and finding solutions for meeting the future challenges.
of India, Ranbaxy realised the urgency to reach out to those who had little or no access even to basic health care
and instituted 'Ranbaxy Rural Development Trust'. Road ahead ...
The main objective of the programme was to deliver primary health care to the underserved and In the future there are plans to develop more need-based programs with emphasis on educating and
underprivileged section of the society to achieve positive health for them and thus to contribute to the national empowering communities through knowledge, access to information and provision of quality services. The aim
objective 'Health For All'. As the scope of the programme and company's commitment grew, in 1994, a remains to improve their quality of life and achieve sustainable human development.
163 164
Ranbaxy Research Foundation Appendix 'G' - Recent Disaster: Tsunami in South-East Asia and the response by Pharmaceutical
companies
Ranbaxy Laboratories Limited incorporated Ranbaxy Research Foundation in 1985 with an implicit mission of
giving impetus to research activity and help in reviving India's great scientific tradition. The Foundation instituted This appendix describes various initiatives undertaken by pharmaceutical companies in India in response to the
Ranbaxy Research Awards to recognize original outstanding contributions in the fields of Medical and tsunami disaster in South East Asia. These have been reproduced verbatim from reports and websites of these
Pharmaceutical Sciences. Every year the Foundation invites nominations for 4 awards - 3 Awards for Rs. companies and from other relevant websites.
1,00,000/- each in the fields of Medical Sciences in Basic. Applied and Clinical Research and 1 Award of Rs.
1,00,000/- each in the fields of Medical Sciences in Basic. Applied and Clinical Research and 1 Award of Rs.
Abbott Laboratories
1,00,000/- in the field of Pharmaceutical Sciences. So far 62 scientists have been honoured by the Foundation.
Ranbaxy Research Foundation was later reconstituted as a separate society as Ranbaxy Science Foundation
and registered under the Societies Act in May 1994. Abbott Laboratories has committed US$4 million in funding and healthcare product donations:
1. Working through humanitarian agencies, AmeriCares and Project HOPE, Abbott is sending needed
Late Prof. V. Ramalingaswami, was the founder Chairman of the Ranbaxy Science Foundation a non-profit prescription drugs and nutritional aid, which is expected to help approximately 60,000 people and is
organisation. valued at US$2 million.
2. Donating US$2million in funding through relief agencies working on the ground in the affected regions.
Today RSF is chaired by renowned scientist Dr.Nityanand
Employees in Abbott's Malaysian affiliate have been working with Mercy Malaysia by volunteering their time to
Environment, Health and Safety help enable the distribution of aid to the affected regions.
Behind every business are the essential values and ideologies on which the core edifice of the business grows. At
Becton Dickinson donates 1 million auto-disable syringes to Government of India as part of the
Ranbaxy, these values are intricately woven in the fabric of its work ethics.
disaster relief measure for Tsunami victims
Caring for the environment is a core corporate value and as part of this commitment, Ranbaxy upgrades the
Becton Dickinson India, a global medical technology company and leader in immunization, has donated 1
environmental protection facilities to deliver standards that would meet and exceed statutory requirements.
million autodisable syringes to the Government of India as its humble contribution to the disaster relief efforts for
At Ranbaxy, regulatory consents, compliance with consent conditions, adequate resources, environment-
Tsunami victims. The syringes will be used for measles vaccination, one of the integrated parts of the disaster
impact assessment and environment management systems form the five absolutes for achieving corporate
relief program.
objectives defined by the EH&S policy. Environment Impact Assessment Studies are carried out periodically to
assess the effect on local environmental conditions effected by the various plants.
BD India also contributed products like needles, syringes, IV catheters, alcohol swabs to Indian Government and
An investment of Rs. 14 Mn was made at Toansa (Punjab) in 2003, by installing a state-of-the-art membrane the Srilankan Health authorities.
filtration module, which would result in total recycling of the treated effluent, with zero-discharge to the
environment, and a modern incineration plant for handling all hazardous solid and liquid wastes. Similar As Individuals, BD associates generously donated clothes, blankets, utensils to the Indian Red Cross in Chennai.
facilities for treating effluents will be installed at other locations. In addition to the voluntary contributions in kind BD India associates also made voluntary cash donation which
was matched by the company.
Ranbaxy takes considerable pride in managing its operations with a high concern for safety and environment.
After all Good Health and Safe Unpolluted Environment are legacies that it would like to hand down to the
future generation.
165 166
Bristol-Myers Squibb Besides a soft loan, sanctioned by the company, the Lifescan Chennai Team and the Head Office team have
made personal contributions to enable Ms. D Glory, her husband and children to rebuild their lives.
Bristol-Myers Squibb has committed US$1 million, as well as significant donations of drugs, to the Red Cross.
Under the guidance of the J&J India contributions Team, the Chennai Contributions team on the very next day,
i.e. December 27, swung into action and established contact with district authorities of Nagapattinam and
BMS's Asia-Pacific region will donate US$100,000 to the International Red Cross. In Indonesia, its unit is leading
Cuddalore, as well as the Chief Minister's Office in Chennai.
an emergency relief program by collecting money and unused goods from employees to be donated to other
employees suffering significant hardship. In Thailand, Mead Johnson Nutritionals has donated US$25,000
worth of Alacta UHT ready to drink and are preparing additional donations, including medicines. In Malaysia, Mr. V Thyagarajan, Mr. V. Vishwanath, and Mr. V Seetharaman formed the four strong pillars of the Chennai
Mead Johnson will be donating US$25,000. contributions team during this hour of need. They visited affected areas of Nagapattinam on December 28 and
distributed food packets, suitcases, gloves, J&J products and cash to the affected communities there. This was
repeated the following day as well with the addition of anti diarhoeal medicines.
The Bristol-Myers Squibb Foundation will match all employee donations to the American Red Cross
International Response Fund.
The India contributions Committee partnered with the Indian red Cross Society to channelise the distribution of
relief materials. In Kerala, medicines and J&J surgical products were provided to affected communities.
J&J touches the lives of the Tsunami Affected
The Delhi Branch Office immediately dispatched medicines and other essential items to the Chennai Committee
Until the morning of December 26, 2004 the word tsunami probably seemed an unfamiliar term to most of us.
for distribution in Nagapattinam and Cuddalore.
Today however, this word is ingrained in our psyches and will continue to dominate our thoughts for a long time
to come.
The Strategic sourcing Team has pledged an amount of Rs. 50, 000 as a donation towards this cause.
The fiercest tsunami in the country's living memory, triggered by the huge earthquake on the seabed off the Contributions amounting to Rs. 2.5 Lakhs were made to Chief Minister's relief Fund in Chennai.
island of Sumatra in Indonesia, sped across the Indian ocean and battered the coastline along the Bay of Bengal
causing considerable damage to life and property specially in the states of Tamil Nadu, Kerala, Andhra and the A donation of Rs. 25 Lakhs has been made to the Indian Red Cross Society, Tamil Nadu, for immediate relief.
Andaman and Nicobar islands.
In the past, whether it was for the Kargil war, the Orissa cyclone, or the Gujrat earthquake, we as Johnsonians The JJCDO Team reached out to the Tsunami Hit people in Nagapattinam and Kerala. They distributed Sure
have always come forward with our support. Thus, it was only natural that once again, Johnsonians took the and Savlon soaps at the tsunami Relief camps, set up in Karungapally. Mr. Venugopal of the Karungapally RDS,
lead in pooling in resources to demonstrate our solidarity with the people in need. M/s Gayatri agencies helped in distributing these items for one week and also used his while for the purpose RSR
r Suresh Vargese personally went to all the camps to undertake the distribution of these J&J products.
We take pride in sharing with you, the array of humanitarian efforts put in by Johnsonians across sectors, across
regions and around the globe. Johnsonians have worked tirelessly and continue to do so, in an attempt to Employees have been requested to contribute 1 day's salary. It was overwhelming to see that some employees
rebuild the lives of thousands of victims of this tragedy. have willingly gone ahead and contributed more than a day's salary. The Company will match the total
employee contribution. This money will be used for long-term rehabilitation efforts. Since this disaster was not
As an immediate response to the crisis, first reactions were to ensure that every Johnsonian and his or her family limited to India, but had far reaching and even more devastating impacts in other countries specially Indonesia
members were safe. IT was very sad to learn that the tsunami had swallowed completely the house of Ms. D. and Sri Lanka. J&J India did not think twice before reaching out to the affected in these countries as well.
Glory, a secretary in Lifescan, Chennai Branch office.
167 168
On receiving a request Mr. Ramakrishnan K of JJMI and his team immediately made it possible to dispatch J&J Lilly Provides Financial Support and Medicines for Tsunami Relief in Southeast Asia
products such as facemasks, hand rubs, caps and barrier gowns to the affected in Banda Aceh - Indonesia.
Eli Lilly and Company today announced that it will provide up to $3 million in cash contributions and donate
Mr. Rajiv Gatne and Mr. Dhiraj of JJMI rushed to Colombo to take stock of the situation. They made a thorough supplies of prescription medicines to tsunami relief in Southeast Asia.
assessment of the damage and identified ways in which J&J could assist in reconstruction and rehabilitation of
the affected. They also distributed biscuits, milk powder and J&J products such as Imodium and band-aid to the
Lilly will provide $2 million in immediate cash contributions to three global relief agencies responding to the
needy. Items such as JPEP Dyna Plast, CLEA-N-SEPT, Savlon, Conc., Surgi pad and sutures were handed over
disaster -- The American Red Cross International Relief Fund, CARE and UNICEF. Lilly also will organize a
to the Ministry of Health for hospital use.
global fund-raising effort among its employees and will match up to $1 million in their contributions. This money
will go to U.S. and international organisations providing disaster relief. In addition, the company will work
Based on Rajiv's assessment and through the untiring of M/s Hashit Joshipura, Bhavesh Shah and Ram Vaidya, through appropriate relief agencies to donate supplies of prescription medicines, which could include Lilly
J&J Corporate has donated an amount of USD 100,000 towards immediate relief activities in Sri Lanka. Mr. antibiotics and insulin.
Bhavesh Shah personally visited Colombo to hand over this donation to the concerned authorities.
"Lilly extends its condolences to those who lost family members and loved ones in this tragic natural disaster.
Ever since the news of this disaster, the India Contribution Committee has been receiving innumerable requests Consistent with Lilly tradition, we will extend a helping hand to assist in the global relief efforts," said Sidney
from Johnsonians across the Board who are eager to know how they can help. There has been no dearth in Taurel, Lilly's chairman, president and chief executive officer.
product donations be it from pharma, consumer or medical.
Lilly and its employees have a long history of providing aid to areas hit by large-scale disasters. Past examples
Across Asia, J&J Corporate has set aside a sum of USD 2 million and has also provided USD 82 million worth of include contributions to relief efforts following the September 11 terrorist attacks in the United States, floods in
products. This was possible only due to the involvement, support and combined efforts of J&J Corporate and the Czech Republic, earthquake victims in Japan and terrorist bombings in Madrid.
members of the Asia Pacific Contributions Committee (APCC) specially, Ms. Katsura Tsuno, Manager APCC, "Our company recognizes that this disaster will require a long-term commitment," added Taurel.
Mr. Benjamin Avanceni, Chairman APCC and Mr. Supratim Bose, Company Group Chairman. They ensured
"Therefore, we will continue to assess the situation to determine how Lilly can best provide aid to the survivors of
the immediate dispatch of emergency medical relief models to Sri Lanka, India and Indonesia.
this natural disaster."
Individual employees have contributed more than USD 330.000 to the Red Cross International Relief fund, to
be matched dollar for dollar, and employee and companies in the region have contributed USD 400,000 to local
Merck Responds to Asia Disaster
agencies as well.
Our thoughts are with the families and communities that have been affected by the devastating tsunami that
We are sure that besides those mentioned here there are many Johnsonians who have in some way assisted in
struck Asia and the eastern coast of Africa on December 26.
reaching out to victims of this tragedy in their hour of need.
To assist in the massive recovery effort, Merck is contributing a total of $3 million to the American Red Cross, the
U.S. Fund for UNICEF and several local agencies working to meet the humanitarian need in the countries
We would therefore like to thank every Johnsonian, for once again providing that Our Credo reigns supreme!
affected by the disaster.
Come what may Johnsonians will always try to uphold the tenets of Our Credo!
Merck's Office of Contributions, which coordinates disaster relief efforts company-wide, is also in contact with a
Our prayers and deepest sympathies are with those whose lives and dreams have been washed away with the
number of relief agencies to determine which Merck medicines may be needed and to review disaster relief
Tsunami. We hope that whatever support we as Johnsonians have rendered will help reduce the heartache that
requests. We remain in constant communication with these organisations and expect to make a substantial
the survivors of this tragedy faced today.
donation of medicines and vaccines once the need is fully assessed.
169 170
In addition to the company's corporate cash and product donations, Merck has activated its Disaster Relief Pfizer to Provide Medicines, Financial and Logistical Support to Relief Effort in Asia
Matching Funds Program to support employees' contributions to humanitarian aid efforts in the region. Through
this program, Merck's 60,000 employees worldwide may make cash contributions to three major agencies
Pfizer to Provide $10 million in Funds to Relief organisations; Company to Also Donate an Estimated $25 Million
working to assist countries affected by the tsunamis - the American Red Cross International Fund, the U.S. Fund
Worth of Medicines and Healthcare Products
for UNICEF and Save the Children. Employee donations will receive matching funds from The Merck Company
Foundation.
The colleagues of Pfizer express their deepest sympathy and condolences to all those affected by the earthquake
and tsunami that struck Asia and the east coast of Africa.
Merck's response to the tsunami reflects our ongoing commitment to helping people around the world in times of
need. Merck's Office of Contributions regularly responds to disaster and medical emergency situations around
Pfizer today announced plans to commit medicines, funds, and logistical support to the relief effort following this
the world and coordinates company-wide responses to these events. This often involves coordinating donations
catastrophic disaster. Pfizer will donate $10 million to local and international relief organisations operating in the
of cash and/or medicines and vaccines, depending on the nature of the disaster.
region. These will include the American Red Cross/International Red Cross and Red Crescent Societies,
International Rescue Committee, Catholic Relief Services, CARE, UNICEF, and Save the Children as well as
For nearly 50 years, the Merck Medical Outreach Program (MMOP), administered by the Office of
local relief organisations.
Contributions, has donated medicines and vaccines for humanitarian purposes, including disaster relief. The
scope of the program varies from year to year and is influenced by changing medical needs in developing
Within hours of the disaster Pfizer colleagues began working with local governments and relief organisations to
countries, the Merck products needed and available for donation, and the random nature of natural and man-
assess which of the company's medicines are needed. As a result of these assessments, Pfizer will contribute
made disasters.
approximately $25 million worth of the company's healthcare products which includes the anti-infective
products Zithromax, Zyvox and Diflucan. Pfizer organisations in Asia have already begun donating Pfizer
Novartis Provides Medicines and Financial Support for Tsunami Victims in South East Asia medicines and discussing logistical support issues with local health and relief officials.
Novartis expresses its concern for the people affected by the tsunami in South East Asia and extends its "Pfizer is responding to this enormous tragedy through the donation of needed medicines, funds, and logistical
condolences to those who lost family members and friends in the this tragic natural disaster. support to assist both in the immediate relief and the longer term management of the disease and health risks,"
said Hank McKinnell, Pfizer chairman and chief executive officer. "In addition to our financial contribution and
Novartis operations in South East Asia have not been directly affected by the tsunami, however, one of our product donations, we are ensuring that Pfizer colleagues with the needed medical and technical skills are
associates has still not been found. available to assist with the relief effort throughout the affected areas."
Immediately after the tsunami, Novartis group companies began to offer help in the form of product and cash The Pfizer Foundation Matching Gifts Program will match US employee contributions to non-profit
donations to support the work of government authorities and relief organisations in the affected countries. organisations assisting in the relief effort.
Novartis senior management approved for this immediate relief support an amount of USD 2 million. Novartis
officials remain in contact with authorities and relief organisations in the region to assess local needs and provide
Ranbaxy to contribute Rs 1.5 Crore in money and essential medicines to PM Fund for Tsunami
further assistance on a targeted basis.
relief operations
Ranbaxy Laboratories Limited (Ranbaxy) today announced a contribution of Rs 1.5 crore by way of money and
essential medicines to the Prime Minister's National Relief Fund, to assist victims of the colossal Tsunami that
ravaged South Asia and South East Asia on Dec 26, 2004. India is among the worst hit countries, in this disaster.
171 172
Reaching out to the thousands rendered homeless, Malvinder Mohan Singh, President, Pharmaceuticals, Twinning projects
Ranbaxy, said, This national calamity has left behind a trail of death, devastation and suffering. Our heart goes
out to those impacted by this grave tragedy. All Ranbaxians feel the same way as I do and they have also
Twinning projects were chosen in close consultation with sanofi-aventis managers and teams in the countries
voluntarily contributed a days salary to help alleviate the enormous suffering.
affected, after visits to the devastated areas to assess needs and consult with partner aid agencies working on the
ground.
Several initiatives within the company have also taken root where employees in their personal capacities are
forming groups to assist with the relief efforts by mobilizing clothing and other items of necessity that will be
The donations received (740,000 euros) will be distributed as follows:
rushed to the disaster hit areas.
· India: 325,000 euros for projects in partnership with the Association du Père Ceyrac, Isha Foundation
and SEEDS
Ranbaxy Laboratories Limited, India's largest pharmaceutical company, manufactures and markets brand and
· Sri Lanka: 70,000 euros in partnership with Sarvodaya and Sewelanka
generic pharmaceuticals and Active Pharmaceutical Ingredients. Ranbaxy's continued focus on R&D has
resulted in several approvals in developed markets and significant progress in New Drug Discovery Research. · Indonesia: 235,000 euros in partnership with Solidarités, UNICEF and Handicap International
Ranbaxy's foray into Novel Drug Delivery Systems has led to proprietary "platform technologies" resulting in a · Thailand: 110,000 euros in partnership with the Thai Red Cross
number of products under development. The Company is selling its products in over 100 countries and has an
expanding international portfolio of affiliates, joint ventures and alliances, ground operations in 44 countries The funds will be devoted primarily to:
and manufacturing operations in 7 countries
· rebuilding livelihoods, through the purchase of fishing boats and nets, for example
· reconstruction of housing and communities
Sanofi-aventis world solidarity day on behalf of South East Asia
· access to health care (repairing dispensaries, financing mobile clinics)
· children's education (rehabilitation of schools, training new teachers, school equipment and supplies,
870,000 euros donated to twinning and sponsorship campaigns
etc.)
1,269 employees to sponsor children in the affected villages
· psychological and social support for families.
On January 25, 2005, sanofi-aventis organized a day of solidarity at 300 Group sites worldwide to allow Group
Child sponsorship projects
employees to play their part in relief actions launched with partner aid agencies in the tsunami-stricken
countries.
1,269 employees in the sanofi-aventis Group have applied to sponsor a child.
· 861 through SOS Children's Villages (in India, Thailand, Indonesia and Sri Lanka)
Thanks to the generosity of sanofi-aventis employees, the sum of 870,000 euros was raised to set up long-term
twinning and child sponsorship projects in stricken villages in India, Sri Lanka, Indonesia and Thailand. · 408 through Enfants du Mékong in Thailand.
The highest employee participation rates were observed:

· on one hand, in the tsunami-stricken countries: Bangladesh, India, Indonesia, Malaysia, Sri Lanka and Each employee will pay his or her donation to the chosen
Thailand. sponsorship project. The Group will contribute a further 130,000

euros to these projects.
· on the other hand, in the following countries : Brazil, Korea, Pakistan and Slovakia
Employees will be able to follow the progress of each project via

the Group Intranet site.
173 174
Appendices
Through this gesture of solidarity, the Group and its employees

will be contributing to the reconstruction of shattered villages and
ORGANISATION OF PHARMACEUTICAL PRODUCERS OF INDIA
providing aid for children in need, not just today but for the long
term.
Sanofi-aventis provides humanitarian aid for South-East About OPPI
Asia OPPI is an organisation of pharmaceutical manufacturers established in 1965. Its membership consists of
International Research based and large Indian pharmaceutical companies.
Jean-François DEHECQ, Chairman and CEO of sanofi-aventis, is currently accompanying Philippe DOUSTE- OPPI members account for a substantial share of the industry’s total sales, investment, export and R&D.
BLAZY, French Minister for Humanitarian aid, Health and the Family in his mission to Colombo, Sri-Lanka, to OPPI is not only an industry association but also a scientific and professional body. It organises national
provide six tons of sanofi-aventis medicines, consisting of 70,000 packs of antibiotics, anti-diarrhea medicines and international seminars and workshops relating to key issues of the pharmaceutical industry and
and antibacterial treatments. healthcare. It supports scientific research by professional and academic institutes. It also brings out
technical publications, like Quality Assurance Guide and Environment, Health & Safety Guide,
Within the framework of a humanitarian initiative, each sanofi- Pharmaceutical Compendium, Research report on outsourcing opportunities etc.
aventis site in France is adopting one of the villages destroyed
OPPI members adhere to the Code of Pharmaceutical Marketing Practices of International Federation of
during the terrible tsunami which recently swept through South-
Pharmaceutical Manufacturers Associations (IFPMA). OPPI is an active member of IFPMA. OPPI is also a
East Asia, and is planning a long-term twinning relationship with
them. member of the World Self-Medication Industry (WSMI) France and has developed code of ethics for
advertisement of drugs.
The group has decided to donate a million euros to institutions and associations which are active in the area. OPPI identifies itself with the country’s national objectives in health and encourages its members to make
· A first installment of 300,000 euros was given to the French Red Cross on December 30, 2004. substantial contributions to social concerns. It also co-ordinates its Members’ efforts in national calamities
· A second installment of 100,000 euros is to be given today to the Association du Père Ceyrac, which like epidemics, floods, earthquakes and cyclone.
is working in the Tamil Nadu region in southern India where the tsunami struck with full force.
OPPI MISSION
Wyeth Pledges $1 Million in Support of Relief Efforts To serve the collective interests of the Members professionally so as to ensure a healthy
environment for profitable growth while making a continuing contribution to Healthcare aims of
The recent tsunami earthquake has devastated many countries in Asia and the Pacific Islands and has had a the nation.
profound impact on millions more across the globe. Consistent with our vision, Wyeth and its employees are
committed to providing assistance to the victims of this disaster.
As part of our response to the critical need for financial assistance, Wyeth has announced a $1 million cash
donation to a range of international relief agencies, such as the International Red Cross and AmeriCares. ORGANISATION OF PHARMACEUTICAL PRODUCERS OF INDIA
Peninsula Corporate Park, Peninsula Chambers, Ground Floor,
Ganpatrao Kadam Marg, Lower Parel, Mumbai 400 013, INDIA.
Working closely with our affiliates and employees who are on the ground in the affected areas, we will continue Tel.: 91 + 22 + 2491 8123, 24912486, 5662 7007 Fax: 91 + 22 + 2491 5168
email: indiaoppi@vsnl.com Website: www.indiaoppi.com
to assess on an ongoing basis how best to assist in the relief efforts including financial and product donations.
175
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OPPI CorporateSocialResponsibility

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ORGANISATION OF PHARMACEUTICAL PRODUCERS OF INDIA

Dr. Shailesh Ayyangar Dr. Ajit Dangi

Limitations : As the study was launched, it unfolded two limitations. Firstly,

Section D outlines the way forward based on discussion of the

2. Section A: Survey of CSR practices 9

3. Section B: Perspectives for making CSR

5. Section D: Conclusions and way forward 119

SURVEY OF CSR PRACTICES

Organisational involvement Qualitative assessment

'Cheque writing' CSR seems to be prevalent with quite a few companies.

1.7. Future plans 2. Background

3. Classification 4. Survey findings

Size 4.1.1. Nature of CSR activities undertaken

Classification Basis No. of companies

Observations 4.1.2. Geographical impact

4.2. Beneficiaries of CSR activities Observations

Category of beneficiaries Overall

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4.3. Approach to implementing CSR activities Observations

4.3.1. Vehicle for implementing CSR activities Overall

4.3.2. Nature of organisations supported 4.4. Investment in CSR

4.4.1.1. Organisational Structure

4.4.1.2. Commencement of CSR 4.4.1.3. Implementation of CSR activities

Specific involvement of Board / Senior management in implementation of CSR activities is higher in

4.4.2. Involvement of financial and other resources

4.4.2.1. Resource investment in CSR activities

'Cheque writing' CSR seems to be prevalent with quite a few companies.

· Allocation of resources is primarily based on the needs of the organisation supported.

4.4.2.4. Frequency of allocating resources 4.5. Impact Assessment

Observations 4.5.2. Types of Qualitative assessment

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4.5.3. Quantitative assessment 4.5.4. Reporting

4.6.1. Benefits to the companies

4.6.3. Level of respect earned 4.6.4. Awards received

Very High High Average Low

Note: Horizontal percentages may aggregate to less than 100%

4.7. Future plans 4.8. Other Observations

A description of various social initiatives undertaken by different

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1. CSR - business and its social relation.

The purpose of a business 52

3. Social relation of a business 54 This space is intentionally left blank

Social responsibilities - What and Why 56

Discharging social responsibilities 59

4. Limits of responsibilities of business for 75

catalyzing progressive social development

5. Assessment and Reporting of activities from a CSR perspective 78

6. The past and current landscape of CSR 82

7. The seven myths relating to CSR 84

8. The future scenario 90

· Discharging social responsibilities effectively How

How should a business deal with impacts?

2. Protecting 'economic performance'.

Please refer to Section C (Paragraph 4(i)) for illustrations.

1. Factor conditions (talent, knowledge, infrastructure)

(ii) allocation of resources by companies to achieve social goals is primarily based

· Core competitive advantage of industries/corporates by reducing the cost of activities/output or

3.2.3.1.The Collaborative Approach

1. Development of 'Factor conditions':

Assess factor availability

Interfacing with educational/research institutions 2. Development of 'Demand conditions':