1. finance
2. bank

Corporate social
responsibility in Iran in a
comparative framework
Yadollah Dadgar Iran
1
BRIEF CONTENT
Introduction
 Principles, approaches, theories
 CSR trend in Iran
 Concluding remarks

2
INTRODUCTION
BRIEF SUMMARY
3 MAIN ELEMENTS:( based on CSR theories
,historical experiences and observable data):
 First: Iran as a significant case study in middle
east
 Second: Comparison as CSR is concerned
 Third: main results of the paper
3
First Element:
 Iran as a significant case study in middle east
1-a great potentiality both positively and…
,historically …(civilization and people not
government. It is unfair and drastic to judge…..
2-its location geopolitically….
3-both natural and human resources,
peaceful mentality, special smartness in final
decision…recent election…e
4
Second Element:
 Comparison as CSR is concerned:
1-before and after 1980..Establishing CSR
2-reform period 1997-2004…moderation
and some progress in CSR
3-hard lining period 2005-2013..collapsing
CSR and any other substantive entities
5
Third Element: considering the first two:
 Results: the role of some factors on CSR
1-well developed private sector or….
2-ideological-extremist or moderate
governance
3-peaceful(not revolutionary or violence
oriented) movements ..green
movement…Arabic Spring… are synergizing
CSR…
6

CSR as a self regulating, human oriented mechanism
is primarily based on ethical and international
standards.

////It is in itself an instrument of common language
and a way of communication, though it is informal,
it is significantly helpful and affective.
7
CSR could potentially be construed as the fourth
integrating part of modern societies: business
sector, government sector, civil sector and CSR
one.
 As the role of companies is significant in daily
activities of ordinary citizens, CSR could have
crucial role thereof.

8
CSR as a synthesis of ethics, law and
international norms could have paramount role in
synergizing altruistic affairs.
 ////Due to complexities in globalization era,
assistance of informal and people oriented
activities including CSR are influential, specially
in resolving some human and ecological
hardships.

9
If business ethics is related to morality of
organizational actions, CSR focuses on the
consequences of organizational actions. So both are
incorporated into a strategic process
 Efficient CSR is going to compromise both profit
maximization and ethical considerations.
 ////Paul. S. Otellini, president of Intel stipulates
that: a key determinant of Intel‘s success is its
ability to advance leadership in corporate
responsibility.

10
////Some successful managers believe that CSR is
no longer optional for business leaders, but a
mandatory duty which is remarkably helpful
 Recent world economic forum stressed on corporate
citizenship as a key factor which will play a crucial
role in shaping the agenda for business leaders for
third decade of 21 century.

11

///Considerable numbers of studies, demonstrate that there is a
significant relationship between financial improvement of
businesses at one hand, and their share of CSR at the other.

Even opponents of CSR believe that business is a social
institution, although they differentiate on the exact meaning of
social responsibility itself.
12

Looking carefully to the main constituents of CSR will reveal its link to the
profitability of business itself.

For, the key elements in CSR could be illuminated as:

Environmental protection

Disclosure of information to stakeholder

Equality of treatment for minorities

Profit sharing

Ethics in advertizing

Philanthropy
13

Companies, specially giant ones, deliver essential
services to over 4 billion customers and play key role in
economic and social development of above 200 countries
throughout the world.
14

////For instance France Telecom Orange, FTO
delivers daily services to over 250 million
customers of 45 countries in Europe, Africa and
the Middle East. Therefore its mangers believe
that CSR is a key component of FTO conquest
2015 strategic project.
15
CSR is closely related to theories of sustainable
development and therefore it includes ecological
aspects, economic justice, welfare of future
generations and so on.
 So many studies suggest that although CSR may
impose some cost on companies in short run, it
enhances their profitable capacity in mid and
long run.

16
As ethical duties overcome the limitations of
legal duties, they could be complements of CSR
aspects.
 In CSR framework, ethical principles as informal
rules of games are energetic partners for legal
principles.

17
Ethical considerations stem from a diversified
sources including religious convictions, moral
traditions, human principles human rights
commitment and so on.
 Although 1920 has been mentioned as the early
period of CSR development, its modern evolution,
however, was alongside with development of
stakeholder theory in 1960s. Decade in question, is
coinciding with a great social change in America.

18

General schematic format of comprehensive CSR
format could be as follows:
Economic
responsibility
Ethical Res
Legal Res
Altruistic Res
Complementary
Responsibility
19

Economic responsibility
constituents as follows:
could
have
some
Satisfying customers
Poverty eradication
Fair rate of returns
Economic
responsibility
Generating upward
mobility
Creating new jobs
Promoting innovation
20
Respecting
peoples
moral rights
Being moral
Ethical
responsibility
Preventing
harms caused
by others
Doing right,
just and fair
21

///One of the strengths of success CSR is that it
relies on dialogue with stakeholders

Some empirical studies indicate that social
quality is inseparable from long term economic
sustainability.
22
Typical aspects regarding CSR

some results of optimum CSR plans are:
Improving in equal opportunity, child protection,
accessibility to internet ,
23

Facilitating access to education and medical
services

Finding innovative solutions for a green world

////Firm commitment to human rights
24

Combating the geographic digital divide

Increasing
access
to
information
and
communication technologies

optimizing waste management and so on
25
IRAN
Introducing a general platform
to analyze Iranian case
performance of CSR before
1980
CSR situation in 1980-2013
26
FACTORS AFFECTING GENERAL CSR PLATFORM
FOR IRAN

Existence of well defined private sector and
independent companies

The role and the nature of the government
27
TYPICAL FRAMEWORK
Commitments
Priorities
Recognize and support
employees
Place people at the heart of the
company support employees in
equal opportunity etc
Ensure transparency quality
and safety for customers
Responsible use of products with
regard to prosecuting children
privacy and data security
Solutions for greener world
etc
Bring economic designed products
reducing customer environmental
footprint decreasing CO2 and so on
28
PUBLIC PRIVATE RELATIONSHIP IN IRAN

////Although Iran has ever suffered from less
developed private sector, this has been terribly
and extremely crucial after 1908s and specially
2005-2013
29

////Public sector especially in 2005-2013 took over
major parts of economy and crowded out private
sector altogether.

////Right know roughly 85% of 100 top Iranian
companies are owned by government or semigovernment.
The
role
of
semi-gov…double
miserable….double tragedy
30
100 TOP IRANIAN COMPANY
Sales
Ranking
N/A
1
2
COMPANY NAME
Industry
National Iranian Oil Company*
Energy and petrochemicals
Iranian Mines and Mining Industries
Development and Renovation
Organization (IMIDRO)*
Mining
Iran Khodro Co.*
Automakers and parts
3
National Petrochemical Co.*
Energy and petrochemicals
4
Saipa Corp.*
Automakers and parts
5
Bank Melli Iran*
Banking and financial
services
31
6
SAPCO
Automakers and parts
7
Mobarakeh Steel
Company
Steel
8
Saderat Bank Iran*
Banking and financial
services
9
Parsian Bank*
Banking and financial
services
10
Bank Mellat*
Banking and financial
services
11
MCI
Telecommunications
12
Sepah Bank*
Banking and financial
services
13
Tejarat Bank
Banking and financial
services
14
Bandar Imam
Petrochemical Co.
Energy and
petrochemicals
32
15
Iran Insurance Co.
Insurance
16
National Iranian Copper Industries Co. (NICICO)
Mining
17
Bank Maskan*
Banking and financial
services
18
Esfahan Steel Company
Steel
19
Islamic Republic of Iran Shipping Lines Co.*
Transportation
20
Keshavarzi Bank*
Banking and financial
services
21
Sazeh Gostar Co.
Automakers and parts
22
MAPNA*
Utilities and infrastructure
23
Bou Ali Sina Petrochemical Industries
Energy and
petrochemicals
24
Khouzestan Steel Co.
Steel
25
Mega Motor Co.
Automakers and parts
33
36
Iran Dairy Industries Co. (PEGAH)*
Beverage and food
37
Iran Khodro Investment Development*
Automakers and parts
38
Pasargad Bank
Banking and financial
services
39
Ahwaz Pipe Mills (APM)
Construction and building
materials
40
Mine and Industry Bank*
Banking and financial
services
41
Asia Insurance Co.
Insurance
42
Behpakhsh Co.
Retail
43
Marun petrochemical complex
Energy and
petrochemicals
44
Melli Iran Exchange Co.
Banking and financial
services
45
AmirKabir Petrochemical Co.
Energy and
petrochemicals
46
Pars Khodro*
Automakers and parts
34
47
Omid Foreign Exchange Company Itd.
Banking and financial
services
48
Bahman Group*
Automakers and parts
49
Arak Petrochemical Co.
Energy and
petrochemicals
50
Ghadir Investment Company*
Banking and financial
services
51
Fars and Khuzestan Cement Co.*
Construction and building
materials
52
Iran Melli-Sanati Steel Group (aka National Iranian Steel
Company)
Steel
53
Shahid Tondgooyan Petrochemical Co.
Energy and
petrochemicals
54
Petrochemical Commercial Company International Ltd. (PCCI)
Energy and
petrochemicals
55
Darou Pakhsh*
Pharmaceuticals
56
Iran Electronics Industries (SAIRAN)*
Computers and
electronics
57
Sadid Industrial Group*
Industrial equipment and
machinery
58
Zagros Petrochemical Co.
Energy and
petrochemicals
35
59
Khark Petrochemical Co.
Energy and
petrochemicals
60
Alborz Investment Co.*
Retail
61
Behshahr Industrial Co.*
Beverage and food
62
Mines and Metals Development Investment Co.(P.J.S)*
Mining
63
Pars Petrochemical Co.
Energy and
petrochemicals
64
Darupakhsh Distribution Co.
Pharmaceuticals
65
Khorasan Steel Complex
Steel
66
Pars Darou Co.*
Pharmaceuticals
67
Tooga-Mapna Turbine Engineering and Production
Utilities and infrastructure
68
Pakhshe Razi Co.
Pharmaceuticals
69
Iran Auto Parts Mfg. and Distribution Co. (ISACO)*
Automakers and parts
70
Iran Transfo Co.*
Utilities and infrastructure
36
71
Sina Bank
Banking and financial
services
72
Iran Tractor Mfg. Co.*
Automakers and parts
73
Saipa Diesel*
Automakers and parts
74
Dana Insurance
Insurance
75
Karafarin Bank
Banking and financial
services
76
Pakhshe Hejrat Co.
Pharmaceuticals
77
Petrochemical Industries Investment Company*
Energy and
petrochemicals
78
Gole-e-Gohar Iron Ore Co.
Mining
79
Iran Aluminium Co. (IRALCO)
Steel
80
Pasargad Oil Co.
Energy and
petrochemicals
37

In addition about 130 holdings are working in Iran
which constitute a remarkable CSR potentiality. The
problem is ,however, government dominance on
those holdings as well.

Historically and as the data indicate, in Iranian case
the more government intervention in economy the
less CSR progress.
38

Comparing CSR indices before and after 1980,
reveals a meaningful relationship in this connection.

////One can observe a brilliant performance of CSR
at least for several companies in 1967-2000,theier
establishment of which …before 1980
39
• SOME TYPICAL SUCCESSFUL CASES IN CSR
TREND BEFORE 1980
Name of company
Industry
Aminozarb (1834-1899)
Train and transportation instruments
Abdollah Moghadam (1899-1983)
Cloth and food products
Mahmud Khalili (1905-74)
Buttery liquid gas
Mahmud Lajavardi (1910-1980)
Textile
Abdorahim Jafari (1919-2010)
Press and publishing industry
Mustafa Aalinasab (1919-2005)
Oven, samovar, carton ,stove
Ahmad Khayami (1924)
Mohamud Khayami (1931)
Automobile industry
40
Mohammad Taghi BarKhordar (19242011)
Television industry
Abdolhamid Fazli (1934..)
constructions and tractor
industries
Abbas Moosavi (1938)
Oil, rubber and plastic
industries
Rahim Zadeh (1938)
Leather industry
Ahmad Taheri Talab (1940)
Pipeline and steal
Mohammad Mahdi Mazloomian (1943)
Micro Industrial instrument
Bahram Haj Karimloo (1944)
Tea packing and noodle
industry
41

As CSR package is concerned these 12 famous
Iranian companies (established before 1980), had
been in top in operating social responsibility.
42

For
instance:
Aalinasab
companies
were
providing the required protein for a considerable
families in slum areas of Tehran seasonally .

///It was devoting at least 35% of its profit to
assist school building construction in 3 provinces
including Azerbaijan.
43

///Khayami company helped the children of poor
workers to complete their elementary school period.

Combating with cancer, launching free medical
services for poor and providing free lunch for low
income workers are among other activities of
company in question.
44

Those 12 famous companies, were doing their
responsibilities in all five folds format (below):
45
Socio-economic
responsibility
Environmental
responsibility
Industry responsibility
Work place responsibility
Inter organizational
responsibility
46

////Optimum governments welcome to CSR , for
CSR reinforces their policies and strategies. In
Iranian case specially under 2005-2013 this is
reverse.
47

To be much more efficient, CSR requires a
democratic and an optimum government.

For, democratic governments construe CSR as
assistant partner for themselves, whereas despotic
governments considers CSR as their rival and
competitors (The case would be seen obviously in
Iranian case 2005-2013).
48

Iranian culture before Islam was influenced under
Zoroastrianism
which
requires
each
firm
devotes 10% of her saving for charities and
helping poor people.
49

After dominance of Islam, the CSR situation was
depending on type of ruling regime. Under moderate and
democratic administration CSR was much more efficient
.We face with the worst situation under totalitarian one.

Under the reform administration 1997-2004 both private
and state owned companies had better performance in CSR
cases.
50

Under 2005-2013 mismanagement in Iran ,every substantive objects
including CSR collapsed altogether.

One hypothesis of this paper is that ideological government is the enemy
of CSR . Thus ,Arabic spring ,Green movement in Iran ,etc are promising
changes. Accordingly , CSR ranking in North Korea, Syria and Iran
under period in question are in the bottom of the list.

The majority of productive and profitable firms have ever being taking by
the government or semi-governments specially revolutionary guard.
51

Due to CSR cases, activities of Simense ,Dena and
other similar companies in Iran, were admired by
people before revolution. The very companies were
denounced by people after changing ownership from
private sector to rentier semi government among
pressure groups.
52

Not surprisingly in Iran particularly and in other
countries generally, trust and reputation are at the
center of CSR .

This is obvious when we take a look at reputation
rank of 28 famous international companies.
53
THE MOST REPUTABLE COMPANIES
1.
Acer
16.
Honda
2.
Air France KLM
17.
In tel
3.
Amazon
18.
LG
4.
Bayer
19.
Micro soft
5.
Canon
20.
Nisan
6.
Daimler
21.
Toyota
7.
Dell
22.
Pana Sonic
8.
Kodak
23.
Phillips
9.
Fed EX
24.
Rolex
10.
Fuji film
25.
Sharp
11.
Ford
26.
Simense
12.
GM
27.
Sony
13.
Google
28.
Zara
14.
Hertz
15.
Hitachi
54

The ranking in question has been released according to
findings of 47000 customer questionnaires throughout
the world.

As Henry Ford correctly stipulates (in 1969): the terms
of contract between companies and societies are
changing. Now we are being asked to serve a wider
range of human values.
55

Green movement in Iran in 2009 after debatable
presidential election proved that Iranian people are very
sensitive to human rights. Thus they evaluate the
performance of companies in this regard seriously.

Some time they prohibited Nokia products for some
times.
56

Iranian people are also pessimistic about the Russian
and Chinese products, this also might be related to
human right hardship over there.

Of course due to international sanctions purchasing
products of Russian and Chinese companies is the
last resort for Iranian citizens.
57

Doing business environment is also an influential
factor on CSR performance. Iran in period in
question is roughly in the bottom of the list of all
countries in region (around 150 among 180
economies).
58

Not surprisingly one can observe a meaningful
relationship between CSR ranking, doing business
situation and the behavior of government.
59
TOP CSR RANKING
country
CSR Rankings
country
CSR Rankings
Netherland
1
Austria
14
Sweden
2
Spain
15
Switzerland
3
Portugal
16
Denmark
4
Australia
17
Norway
5
Canada
18
Germany
6
Ireland
19
Finland
7
Check republic
20
Slovenia
8
Japan
21
France
9
Cyprus
22
Iceland
10
Greece
23
Italy
11
Poland
24
Belgium
12
Israel
25
Singapore
13
Luxemburg
26
60

In Iran in so called “reform period” 1997-2004
(ruled by a democratic administration), both CSR
and doing business were much more better than
totalitarian period (2005-2013).
61

Some typical cases in CSR in reform period: 1Mehrafarin company was building some schools
for poor Afghani emigrants in Iran 2- Tadbigran
launched painting workshop for poor children 3Pishgaman helped to decrease unemployment rate
among Iranian women.
62

4- Rahavard company built a library for children
and their mums 5- Tooga launched musical classes
for low income teenagers (50 persons each
semester). 6- women entrepreneur association
launched remarkable numbers of social networks
voluntarily.
63

7- Chargon Co organized computer classes for poor
students 8- Mehad Co helped qualified students
among poor families to continue university classes 9Stedtler Co learned 300 students how to produce
stationery materials
64

Aalinasab companies supported financial cost of
reformist candidates 11- Sarmad company was
financing pocket moneys of 60 poor students each
semester 12- Yavaran Co were fixing the electricity
devices for poor voluntarily.
65

Poyesh Co was serving free dental services for poor
people 14- Asayesh, Mapna, Raad, Zooragh,
Damavand Mineral water and so many other
companies were working hard to improve their share
in social responsibility. All these activities declined
massively during the 2005-2013 administration
66
CONCLUDING REMARKS

Human rights, equal treatment with all, poverty
alleviation and environmental protection are crucial
and signaling factors in CSR performances (specially
in Iran).
67

Doing
business
environment,
democratic
government, and well defined private sectors are
backing factors for improving CSR .
68

According to results of research of one of my
colleagues 92% of managers of main Iranian
companies maintain that role of government in
enhancing CSR is very crucial.
69

This is consistent with Drucker’s famous findings in
this respect. He who is among father funders of CSR
stresses on the role of government in both
reinforcing and worsening this phenomenon.
70

Iranian
trade law in 1967 does have some special
articles regarding CSR ( one can maintain on Articles
137 and 138 particularly).

According to those articles and actual performance of
main companies, before 1980 Iranian progress in CSR is
defendable but after 1980 it depends on nature and
behavior of public administration.
71

More than 2500 years before Christ Iranian civilization
was influenced by Zoroastrianism.

Main slogans and mottos of Zoroastrianism are: Good
thoughts, good words and good deeds. This three fold
path is the center of the faith
72

One can summarize Iranian case regarding CSR as
follows:

1- Potentially speaking social responsibility has ever
been in the heart of Iranian civilization specially among
the business sectors.
73
2- Before dominance of Islam and in Zoroastrian era the
behavior of business sector were reinforcing the CSR
framework.
3- The role of government and independence of private
sector has ever been influential in CSR progress.
74
4- After dominance of Islamic government the
situation has been related to the type of
government as such. In case of moderate and
democratic (as in 1997-2004), the CSR ranking
was remarkable, under ideological one (20052013), however, we do face with the worst
results in this regard.
75
5- Taking over main companies by ideological
government
and
semi-government
(like
revolutionary guard) is the main factor affecting
inefficiencies of CSR in Iranian case.
76
6- The dominance of moderate and democratic
administration hopefully will change the result.
7- I do believe that green movement in Iran, and
Arabic spring in other middle east regions could
have promising role in enhancing efficacy of CSR in
the region.
Thank you
77