CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate social responsibility (CSR, also called corporate conscience, corporate citizenship, social performance, or sustainable responsible business/ Responsible Business) is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. The goal of CSR is to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders.
The term "corporate social responsibility" came into common use in the late 1960s and early 1970s after many multinational corporations formed the term stakeholder, meaning those on whom an organization's activities have an impact. It was used to describe corporate owners beyond shareholders as a result of an influential book by R. Edward Freeman, Strategic management: a stakeholder approach in 1984. Proponents argue that corporations make more long term profits by operating with a perspective, while critics argue that CSR distracts from the economic role of businesses. Others argue CSR is merely window-dressing, or an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations.
CSR is titled to aid an organization's mission as well as a guide to what the company stands for and will uphold to its consumers. Development business ethics is one of the forms of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. ISO 26000 is the recognized international standard for CSR. Public sector organizations (the United Nations for example) adhere to the triple bottom line (TBL). It is widely accepted that CSR adheres to similar principles but with no formal act of legislation. The UN has developed the Principles for Responsible Investment as guidelines for investing entities. what does 'Corporate Social Responsibility' mean anyway? Is it a stalking horse for an anti-corporate agenda? Something which, like original sin, you can never escape? Or what?
Different organisations have framed different definitions - although there is considerable common ground between them. My own definition is that CSR is about how companies manage the business processes to produce an overall positive impact on society.
Companies need to answer to two aspects of their operations. 1. The quality of their management - both in terms of people and processes (the inner circle). 2. The nature of, and quantity of their impact on society in the various areas.
Outside stakeholders are taking an increasing interest in the activity of the company. Most look to the outer circle - what the company has actually done, good or bad, in terms of its products and services, in terms of its impact on the environment and on local communities, or in how it treats and develops its workforce. Out of the various stakeholders, it is financial analysts who are predominantly focused - as well as past financial performance - on quality of management as an indicator of likely future performance.
Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large
The same report gave some evidence of the different perceptions of what this should mean from a number of different societies across the world. Definitions as different as CSR is about capacity building for sustainable livelihoods. It respects cultural differences and finds the business opportunities in building the skills of employees, the community and the government from Ghana, through to CSR is about business giving back to society from the Phillipines.

SCOPE AND MISSION OF CSR
Marsh & McLennan Companies is committed to the communities in which it operates and where its employees live and work. The focus of Marsh & McLennan Companies’ corporate social responsibility (CSR) program revolves around charitable giving, employee volunteer programs, pro bono work, scholarship programs, matching gifts and humanitarian responses to disasters. Marsh & McLennan Companies partners with organizations whose programs and services improve the quality of life and address the needs of society, emphasizing issues surrounding education, environment and health.
Marsh & McLennan Companies and the Operating Companies continue to develop initiatives and programs that support people and communities at risk.

SYSTEM - A system (from Latin systēma "whole compounded of several parts or members, system", literary "composition") is a set of interacting or interdependent components forming an integrated whole.
A system is a set of elements (often called 'components' instead) and relationships which are different from relationships of the set or its elements to other elements or sets.
The term system may also refer to a set of rules that governs structure and/or behavior.
A set of detailed methods, procedures, and routines established or formulated to carry out a specific activity, perform a duty, or solve a problem.

An organized, purposeful structure regarded as a whole and consisting of interrelated and interdependent elements (components, entities, factors, members, parts etc.). These elements continually influence one another (directly or indirectly) to maintain their activity and the existence of the system, in order to achieve the goal of the system.
All systems have (a) inputs, outputs, and feedback mechanisms, (b) maintain an internal steady-state (called homeostasis) despite a changing external environment, (c) display properties that are peculiar to the whole (called emergent properties) but are not possessed by any of the individual elements, and (d) have boundaries that are usually defined by the system observer.

SOCIAL SYSTEM – The people in a society considered as a system organized by a characteristic pattern of relationships; "the social organization of England and America is very different"; "sociologists have studied the changing structure of the family".

ECONOMIC SYSTEM - An economic system is the combination of the various agencies, entities (or even sectors as described by some authors) that provide the economic structure that defines the social community. These agencies are joined by lines of trade and exchange along which goods, money etc. are continuously flowing. An example of such a system for a closed economy is shown in the flow-diagram. The economics system involves production, allocation of economic inputs, distribution of economic outputs, Landlords and land availability, households (earnings and expenditure consumptionof goods and services in an economy), Capitalists, Banks (finance institutions) and Government. It is a set of institutions and their varioussocial relations.
Alternatively, it is the set of principles by which problems of economicsare addressed, such as the economic problem of scarcity through allocation of finite productive resources. An economic system is composed of people, institutions, rules, and relationships. For example, the convention of property, the institution of government, or the employee-employer relationship. Examples of contemporary economic systems include capitalist systems, socialist systems, and mixed economies. Today the world largely operates under a global economic system based on the capitalist mode of production.
"Economic systems" is the economics category that includes the study of such systems.

POLITICAL SYSTEM - A system of politics and government. It is usually compared to the legal system,economic system, cultural system, and other social systems. However, this is a very simplified view of a much more complex system of categories involving the views: who should have authority, how religious questions should be handled, and what the government's influence on its people and economy should be. * A political system is a complete set of institutions, interest groups (such as political parties, trade unions, lobby groups), the relationships between those institutions and the political norms and rules that govern their functions (constitution, election law). * A political system is composed of the members of a social organization (group) who are in power. * A political system is a system that necessarily has two properties: a set of interdependentcomponents and boundaries toward the environment with which it interacts. * A political system is a concept in which theoretically regarded as a way of the government makes a policy and also to make them more organized in their administration. * A political system is one that ensures the maintaining of order and sanity in the society and at the same time makes it possible for some other institutions to also have their grievances and complaints put across in the course of social existence.

JACK WELCH
John Francis "Jack" Welch, Jr. (born November 19, 1935) is an American chemical engineer,business executive, and author. He was Chairman and CEO of General Electric between 1981 and 2001. During his tenure at GE, the company's value rose 4000% and was the most valuable company in the world for a time. In 2006 Welch's net worth was estimated at $720 million.

Jack Welch grew to fame in the business world through his management success and skills during his many years at General Electric. Welch turned the struggling slow moving giant of a company into a dynamic growth company revered by many. During his 20 years of leadership at General Electric (GE) Welch increased the value of the company from $13 billion to several hundred billion.

Born John Frances Welch Jr. in Salem Massachusetts USA in 1935. Welch received his B.S. degree at the University of Massachusetts in Chemical Engineering and then went on to receive his M.S. and Ph.D degrees (as a Chemical Engineer) at the University of Illinois.

After graduating in 1960 Welch joined General Electric as a Chemical engineer and worked his way through the ranks to become the Chairman and CEO of GE, making him the eighth and youngest leader.

During his 20 year reign of General Electric, one of Americas largest and most well known companies Jack Welch's management skills became almost legendary. His no nonsense leadership style gave him a reputation of being hard, even ruthless, but also fair when making business decisions.

Welch had little time for bureaucracy and archaic business ways. If managers didn't change they were replaced with someone that could change. Managers were given free reign as long as they followed the GE ethic of constant change and striving to do better. He ran GE like a small dynamic business able to change as opportunities arose or when a business become unprofitable.

In his pursuit to change and streamline the General Electric giant Welch once earned the nickname of Neutron Jack. More than 100,000 GE employees had their jobs taken from them during his reign. GE businesses had to be the best performing business in their field or they were sold.

General Electric saw great growth and expansion under Jack Welch's leadership. Through streamlining operations, acquiring new businesses, and ensuring that each business under the GE umbrella was one of the best in its field the company was able expand dramatically from 1981 to 2001.

Love him or hate him, there is no denying that Jack Welch is an exceptional manager and improved the General Electric company dramatically. His management ideas and leadership skills are both admired by business commentators and imitated by business leaders worldwide.

Since retiring from his role as GE Chairman in 2001 Welch has written a best selling memoir "Jack, Straight from the Gut" and consults with several Fortune 500 businesses.

Jack Welch was married to his first wife Carolyn for 28 years and had four children with her. He was married to his second wife Jane Beasley for almost 14 years. Welch married his third and current wife Suzy Wetlaufer after the couple began an affair when Wetlaufer interviewed Welch while working for the Harvard Business Review publication.

EARLY LIFE AND CAREER

Jack Welch was born in Peabody, Massachusetts to John, a Boston & Maine Railroad conductor, and Grace, a homemaker.
Welch attended Salem High School and later the University of Massachusetts Amherst, graduating in 1957 with a Bachelor of Sciencedegree in chemical engineering. While at university he was a member of the Alpha chapter of the Phi Sigma Kappa fraternity.
Welch went on to receive his M.S. and Ph.D at the University of Illinois at Urbana-Champaign in 1960.
Welch joined General Electric in 1960. He worked as a junior chemical engineer in Pittsfield, Massachusetts, at a salary of $10,500 annually. While at GE, he blew off the roof of the factory, and was almost fired for doing so. Welch was displeased with the $1,000 raise he was offered after his first year, as well as the strict bureaucracy within GE. He planned to leave the company to work with International Minerals & Chemicals in Skokie, Illinois.
Reuben Gutoff, a young executive two levels higher than Welch, decided that the man was too valuable a resource for the company to lose. He took Welch and his first wife Carolyn out to dinner at the Yellow Aster in Pittsfield, and spent four hours trying to convince Welch to stay. Gutoff vowed to work to change the bureaucracy to create a small-company environment.
"Trust me," Gutoff remembers pleading. "As long as I am here, you are going to get a shot to operate with the best of the big company and the worst part of it pushed aside." "Well, you are on trial," retorted Welch. "I'm glad to be on trial," Gutoff said. "To try to keep you here is important." At daybreak, Welch gave him his answer. "It was one of my better marketing jobs in life," recalls Gutoff. "But then he said to me--and this is vintage Jack--'I'm still going to have the party because I like parties, and besides, I think they have some little presents for me.'" Some 12 years later, Welch would audaciously write in his annual performance review that his long-term goal was to become CEO.
Welch was named a vice president of GE in 1972. He moved up the ranks to become senior vice president in 1977 and vice chairman in 1979. Welch became GE's youngest chairman and CEO in 1981, succeeding Reginald H. Jones. By 1982, Welch had disassembled much of the earlier management put together by Jones.
Tenure as CEO of GE
Through the 1980s, Welch worked to streamline GE. In 1981 he made a speech in New York City called "Growing fast in a slow-growth economy". This is often acknowledged as the "dawn" of the obsession with shareholder value. Later, in an interview with the Financial Times on the Global financial crisis of 2008–2009, Welch said, “On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy... your main constituencies are your employees, your customers and your products.” Welch did not make such a comment while still the CEO of GE. He also pushed the managers of the businesses he kept to become more productive. Welch worked to eradicate perceived inefficiency by trimming inventories and dismantling the bureaucracy that had almost led him to leave GE in the past. He shut down factories, reduced payrolls and cut lackluster old-line units. Welch's public philosophy was that a company should be either #1 or #2 in a particular industry, or else leave it completely. Welch's strategy was later adopted by other CEOs across corporate America.
Each year, Welch would fire the bottom 10% of his managers. He earned a reputation for brutal candor in his meetings with executives. He would push his managers to perform, but he would reward those in the top 20% with bonuses and stock options. He also expanded the broadness of the stock options program at GE from just top executives to nearly one third of all employees. Welch is also known for destroying the nine-layer management hierarchy and bringing a sense of informality to the company.
During the early 1980s he was dubbed "Neutron Jack" (in reference to the neutron bomb) for eliminating employees while leaving buildings intact. In Jack: Straight From The Gut, Welch states that GE had 411,000 employees at the end of 1980, and 299,000 at the end of 1985. Of the 112,000 who left the payroll, 37,000 were in sold businesses, and 81,000 were reduced in continuing businesses. In return, GE had increased its market capital tremendously. However, Welch eliminated basic research, and had closed or sold off businesses that were allegedly under-performing. These and other moves placed basic research at the bottom of the list with respect to funding and attention.
In 1986, GE acquired RCA. RCA's corporate headquarters were located in Rockefeller Center; Welch subsequently took up an office in the now GE Building at 30 Rockefeller Plaza. The RCA acquisition resulted in GE selling off RCA properties to other companies and ultimately keeping NBC as part of the GE portfolio of businesses. During the 1990s, Welch shifted GE business from manufacturing to financial services through numerous acquisitions.
Welch adopted Motorola's Six Sigma quality program in late 1995. In 1980, the year before Welch became CEO, GE recorded revenues of roughly $26.8 billion. In 2000, the year before he left, the revenues increased to nearly $130 billion. When Jack Welch left GE, the company had gone from a market value of $14 billion to one of more than $410 billion at the end of 2004, making it the most valuable and largest company in the world.
At the time of his retirement in 2001, Welch received a salary of $4 million a year, followed by his controversial retirement plan of $8 million a year, which included GE's $80,000 per month luxury apartment in Trump Tower (New York City), free food and wine, access to a $300,000 per month B737 corporate jet, VIP tickets to the Metropolitan Opera, the Knicks, Wimbledon, the US Open (tennis) and the Red Sox, an office and a secretary in the GE building and a limousine with driver. In 1999 he was named "Manager of the Century" by Fortune magazine.
There was a lengthy and well-publicized succession planning saga prior to his retirement between James McNerney, Robert Nardelli, andJeffrey Immelt, with Immelt eventually selected to succeed him as Chairman and CEO. Nardelli became the CEO of Home Depot until his resignation in early 2007, and until recently, was the CEO of Chrysler, while McNerney became CEO of 3M until he left that post to serve in the same capacity at Boeing.
CRITICISM
Some industry analysts claim that Welch is given too much credit for GE's success. They contend that individual managers are largely responsible for the company's success. For example, GE Capital, under Gary C. Wendt, contributed nearly 40% of the company's total earnings while NBC, and Robert C. Wright worked to turn the network around, leading to five years of double-digit earnings growth. It is also held that Welch did not rescue GE from great losses as the company had 16% annual earnings growth during the tenure of his predecessor,Reginald H. Jones. Critics also say that "the pressure Welch imposes leads some employees to cut corners, possibly contributing to some of the defense-contracting scandals that have plagued GE, or to the humiliating Kidder, Peabody & Co. bond-trading scheme of the early 1990s that generated bogus profits".
Welch has also received criticism over the years for an apparent lack of compassion for the middle class and working class. By his actions during acquisitions and wholesale shutdowns of GE business units Welch proved that his technique of only keeping the units your company is "good" at you can maximize ROI for the short term. In the meantime (as of 1990) thousands of employees have been removed from the rolls of GE. Welch has publicly stated that he is not concerned with the discrepancy between the salaries of top-paid CEOs and those of average workers. When asked about the issue of excessive CEO pay, Welch has stated that such allegations are "outrageous" and has vehemently opposed proposed SEC regulations affecting executive compensation. Countering the public uproar over excessive executive pay(including backdating stock options, golden parachutes for nonperformance, and extravagant retirement packages), Welch stated that CEO compensation should continue to be dictated by the free market, without interference from government or other outside agencies. In addition, Welch is a vocal opponent of the Sarbanes-Oxley Act of 2002
PERSONAL LIFE
He had four children with his first wife, Carolyn. They divorced amicably in April 1987 after 28 years of marriage. His second wife, Jane Beasley, was a former mergers-and-acquisitions lawyer. She married Jack in April 1989, and they divorced in 2003. While Welch had crafted a prenuptial agreement, Beasley insisted on a ten-year time limit to its applicability, and thus she was able to leave the marriage with an amount believed to be around $180 million.
Welch's third wife, Suzy Wetlaufer, co-authored his 2005 book Winning as Suzy Welch. Wetlaufer served briefly as the editor-in-chief of theHarvard Business Review. Welch's wife at the time, Jane Beasley, found out about an affair between Wetlaufer and Welch. Beasley informed the review and Wetlaufer was forced to resign in early 2002 after admitting to having been involved in an affair with Welch while preparing an interview with him for the magazine.
Welch underwent triple bypass surgery in May 1995. He returned to work full time in September of the same year and also adopted an exercise schedule that included golf. Welch is a member of Augusta National Golf Club. However, in Winning, Welch acknowledges that back problems forced him to give up playing golf, and that, surprisingly, he doesn't miss it. He acknowledges using his time formerly spent on the golf course to consult with companies and indulge other personal interests such as modern art, international travel, teaching, and attending Red Sox games. Since then, he has picked up his golf game, playing at courses such as Nantucket Golf Club, Sankaty Head Golf Club, and the Country Club of Fairfield, Connecticut among others.
On January 25, 2006, Welch gave his name to Sacred Heart University's College of Business, which will be known as the "John F. Welch College of Business".
Since September 2006, Welch has been teaching a class at the MIT Sloan School of Management to a hand-picked group of 30 MBA students with a demonstrated career interest in leadership. He is also a global warming skeptic. Yet he has said that every business must embrace green products and green ways of doing business, "whether you believe in global warming or not...because the world wants these products."
Thanks to a donation from Jack Welch, the Jack Welch Management Institute at the Chancellor University in Ohio was founded in July 2009. The institute offers a MBA program based on Welch's management philosophy. Classes are offered both online and at the school’s Cleveland campus.
On March 11, 2010, Welch appeared as himself in the fourteenth episode of the fourth season of the hit NBC sitcom 30 Rock. In the episode, he governed the sale of NBC Universal to a fictional Philadelphia-based cable company, Kabletown, a parody of the actual acquisition of NBC Universal from General Electric by Comcast in November 2009.
In August 2010, Jack Welch was interviewed by Bill Hybels on the topic of leadership during The Global Leadership Summit, which is hosted by Willow Creek Association.
In June 2011, Jack Welch revealed in an interview with Piers Morgan that he is a Republican.