the social responsibility of business
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Social Responsibility Of Business
Introduction
SOCIAL RESPONSIBILITY
The term social responsibility means different things to different people.
Generally, corporate social responsibility is the obligation to take action that
protects and improves the welfare of society as a whole as well as organizational
interests. According to the concept of corporate social responsibility, a manager
must strive to achieve both organizational and societal goals.
Current perspectives regarding the fundamentals of social responsibility of
businesses are listed and discussed through
(1) the Davis model of corporate social responsibility,
(2) areas of corporate social responsibility, and
(3) varying opinions on social responsibility.
A model of corporate social responsibility that was developed by Keith Davis
provides five propositions that describe why and how businesses should adhere to
the obligation to take action that protects and improves the welfare of society and
the organization:
Proposition 1: Social responsibility arises from social power.
Proposition 2: Business shall operate as an open system, with open receipt of
inputs from society and open disclosure of its operation to the public.
Proposition 3: The social costs and benefits of an activity, product, or service
shall be thoroughly calculated and considered in deciding whether to proceed
with it.
Proposition 4: Social costs related to each activity, product, or service shall be
passed on to the consumer.
Proposition 5: Business institutions, as citizens, have the responsibility to
become involved in certain social problems that are outside their normal areas
of operation.
The areas in which business can become involved to protect and improve the
welfare of society are numerous and diverse. Some of the most publicized of these
areas are urban affairs, consumer affairs, environmental affairs, and employment
practices. Although numerous businesses are involved in socially responsible
activities, much controversy persists about whether such involvement is necessary
or appropriate. There are several arguments for and against businesses performing
socially responsible activities.
The best-known argument supporting such activities by business is that because
business is a subset of and exerts a significant impact on society, it has the
responsibility to help improve society. Since society asks no more and no less of
any of its members, why should business be exempt from such responsibility?
Additionally, profitability and growth go hand in hand with responsible treatment
of employees. customers, and the community. However, studies have not indicated
any clear relationship between corporate social responsibility and profitability.
One of the better known arguments against such activities is advanced by the
distinguished economist Milton Friedman. Friedman argues that making business
managers simultaneously responsible to business owners for reaching profit
objectives and to society for enhancing societal welfare represents a conflict of
interest that has the potential to cause the demise of business.
According to Friedman, this demise almost certainly will occur if business
continually is forced to perform socially responsible behavior that is in direct
conflict with private organizational objectives. He also argues that to require
business managers to pursue socially responsible objectives may be unethical,
since it requires managers to spend money that really belongs to other individuals.
Regardless of which argument or combination of arguments particular managers
might support, they generally should make a concerted effort to perform all legally
required socially responsible activities, consider voluntarily performing socially
responsible activities beyond those legally required, and inform all relevant
individuals of the extent to which their organization will become involved in
performing social responsibility activities.
Federal law requires that businesses perform certain socially responsible activities.
In fact, several government agencies have been established and are maintained to
develop such business-related legislation and to make sure the laws are followed.
The Environmental Protection Agency does indeed have the authority to require
businesses to adhere to certain socially responsible environmental standards.
Adherence to legislated social responsibilities represents the minimum standard of
social responsibility performance that business leaders must achieve. Managers
must ask themselves, however, how far beyond the minimum they should attempt
to go difficult and complicated question that entails assessing the positive and
negative outcomes of performing socially responsible activities. Only those
activities that contribute to the business's success while contributing to the welfare
of society should be undertaken.
Social Responsiveness
Social responsiveness is the degree of effectiveness and efficiency an organization
displays in pursuing its social responsibilities. The greater the degree of
effectiveness and efficiency, the more socially responsive the organization is said
to be. The socially responsive organization that is both effective and efficient
meets its social responsibilities without wasting organizational resources in the
process. Determining exactly which social responsibilities an organization should
pursue and then deciding how to pursue them are perhaps the two most critical
decision-making aspects of maintaining a high level of social responsiveness
within an organization. That is, managers must decide whether their organization
should undertake the activities on its own or acquire the help of outsiders with
more expertise in the area.
In addition to decision making, various approaches to meeting social obligations
are another determinant of an organization's level of social responsiveness. A
desirable and socially responsive approach to meeting social obligations involves
the following:
Incorporating social goals into the annual planning process
Seeking comparative industry norms for social programs
Presenting reports to organization members, the board of directors, and
stockholders on progress in social responsibility
Experimenting with different approaches for measuring social performance
Attempting to measure the cost of social programs as well as the return on
social program investments
S. Prakash Sethi presents three management approaches to meeting social
obligations:
(1) the social obligation approach,
(2) the social responsibility approach, and
(3) the social responsiveness approach.
Each of Sethi's three approaches contains behavior that reflects a somewhat
different attitude with regard to businesses performing social responsible activities.
The social obligation approach, for example, considers business as having
primarily economic purposes and confines social responsibility activity mainly to
conformance to existing laws. The socially responsible approach sees business as
having both economic and societal goals. The social responsiveness approach
considers business as having both societal and economic goals as well as the
obligation to anticipate upcoming social problems and to work actively to prevent
their appearance.
Organizations characterized by attitudes and behaviors consistent with the social
responsiveness approach generally are more socially responsive than organizations
characterized by attitudes and behaviors consistent with either the social
responsibility approach or the social obligation approach. Also, organizations
characterized by the social responsibility approach generally achieve higher levels
of social responsiveness than organizations characterized by the social obligation
approach. As one moves from the social obligation approach to the social
responsiveness approach, management becomes more proactive. Proactive
managers will do what is prudent from a business viewpoint to reduce liabilities
whether an action is required by law or not.
Definition of Social Responsibility
Social responsibility is “an organization’s obligation to maximize its positive
impact and minimize its negative impact on the society”. In other words, it is “the
concept that businesses should be actively concerned with the welfare of the
society at large”.
The concept of social responsibility is applicable to individuals and governments
as well as organizations. The social responsibility of an organization is referred to
as ‘corporate social responsibility’.
Social responsibility can be broadly divided into two parts: human responsibility
and environmental responsibility.
Human responsibility
Refers to the responsibility of the organization towards the various parties
associated with it, which are known as ‘stakeholders’ in business parlance. These
parties include employees, shareholders, the government, customers, investors,
suppliers, competitors and the society at large.
Environmental responsibility
Refers to the organization’s responsibility towards environment protection.
The concept of social responsibility holds that an organization should work in a
manner in which the interests of the stakeholders are protected or, at the very least,
they are not adversely affected. It holds that the organization should work in an
ethical manner and work in the best interests of the various parties associated with
it. The realm of social responsibility extends beyond the legal responsibilities of an
organization. It is voluntarily fulfilled by the organization.
The concept of corporate social responsibility has been criticized by certain
experts, who believe that it is a cynical and selfish idea. They are of the opinion
that corporates undertake projects for social welfare only because of the increase in
reputation that they would get due to them.
Arguments for Social Responsibility
The major arguments for the assumption of social responsibilities by business are:
1) Public expectations: Social expectations of business have increased
dramatically since the 1960s. Public opinion in support of business pursuing
social as well as economic goals is now well solidified.
2) Long run profits: Socially responsible businesses tend to have more and
secure long run profits. This is the normal result of the better community
relations and improved business image that responsible.
3) Ethical obligation: A business firm can and should have a conscience.
Business should be socially responsible because responsible actions are right
for their own sake.
4) Public image: Firms seek to enhance their public image to gain more
customers, better employees, access to money markets, and other benefits.
Since the public considers social goals to be important, business can create a
favorable public image by pursuing social goals.
5) Better environment: Involvement by business can solve difficult social
problems, thus creating a better quality of life and a more desirable
community in which to attract and hold skilled employees.
6) Discouragement of further government regulation: Government regulation
adds economic costs and restricts management’s decision flexibility by
becoming socially responsible, business can expect less government
regulation.
7) Balance of responsibility and power: Business has a large amount of power
in society. An equally large amount of responsibility is required to balance
it. When power is significantly greater than responsibility, the imbalance
encourages irresponsible behavior that works against the public good.
8) Stockholder interests: Social responsibility will improve the price of a
business’s stock in the long run. The stock market will view the socially
responsible company as less risky and open to public attack. Therefore, it
will award its stock a higher price earning ratio.
9) Possession of resources: Business has the financial resources, technical
experts, and managerial talent to provide support to public and charitable
projects that need assistance.
10) Superiority of prevention over cures: Social problems must be dealt with at
sometime. Business should act on them before they become serious and costly to
correct and take management’s energy away from accomplishing its goal of
production goods and services.
Arguments against Social Responsibility
1) Violation of profit maximization: This is the essence of the classical
viewpoint. Business is most socially responsible when it attends strictly to its
economic interests and leaves other activities to other institutions.
2) Dilution of purpose: The pursuit of social goals dilutes business’s primary
purpose: economic productivity. Society may suffer as both economic and social
goals are poorly accomplished.
3) Costs: Many socially responsible activities do not pay their own way. Someone
has to pay these costs. Business must absorb these costs or pass them on to
consumers in higher prices.
4) Too much power: Business is already one of the most powerful institutions in
our society. If it pursued social goals, it would have even more power. Society has
given business enough power.
5) Lack of skills: The outlook and abilities of business leaders are oriented
primarily toward economies. Business people are poorly qualified to cope with
social issues.
6) Lack of accountability: Political representatives pursue social goals and ar6e
held accountable for their actions. Such is not the case with business leaders. There
are no direct lines of social accountability from the business sector to the public.
7) Lack of broad public support: There is no broad mandate from society for
business to become involved in social issues. The public is divided on the issue. In
fact, it is a topic that usually generates a heated debate. Actions taken under such
divided support are likely to fail
Social Responsibility towards different parties
CSR operations have been brought in the practice of the leading and socially
responsible companies recently. Since the time it was not yet defined by the
marketing theory as so CSR has steadily presented in the complex work process of
Bulyard Shipbuilding Industry EAD. CSR presents responsibility to employees, the
environment and the interested parties, as well as participations in socially
significant projects and charity.
The overall CSR activity pursues company goals related to the productivity, incl.
keeping and upgrading the employees’ and workers’ qualification, human
resources, incl. employees’ and workers’ motivation and setting up of teams,
improving working environment.
Considerable part of the CSR operations of the enterprise is announced by
publishing financial statements, capital rationing information and random press-
releases and articles of different subjects.
Social Responsibility of Management and Responsibilities of
managers
Social Responsibilities of Management
The term social responsibilities can be defined as the obligation of management
towards the society and others concerned.
Reason for Social Responsibilities:
Business enterprises are creatures of society and should respond to the demands of
society. If the management does not react to changes in social demands, the society
will either force them to do so through laws or will not permit the enterprise to
survive. Therefore the longterm interests of business are best served when
management assume social responsibilities. The image of business organization
liked with the quality of its products and customer service and the extent to which
it fulfills the expectations of owners, employees, consumers, government and the
community at large. For longterm success it matters a great deal if the firm has a
favourable image in the public mind. Every business enterprise is a organ of
society and its activities have impact on the social scene. Therefore, it is important
for management to consider whether their policies and actions are likely to
promote the public good, advances the basic values of society, and constitute to its
stability, strength and harmony.
Increasing concern for the social responsibility of management, it is now
recognized that besides taking care of the financial interest of owners, managers of
business firms must also take into account the interest of various other groups such
as employees, consumers, the government and the community as a whole. These
interested groups are directly or indirectly affected by the pursuit of business
activities and they are the stake-holders of the business enterprise.
Responsibility towards owners:
The primary responsibilities of management is to assure a fair and reasonable rate
of return on capital and fair return on investment can be determined on the basis of
difference in the risks of business in different fields of activity. With the growth of
business the shareholders can also expect appreciation in the value of their capital.
Responsibility towards employees:
Management responsibility towards employees relate to the fair wages and
salaries, satisfactory work environment, labour management relations and
employee welfare. Fair wages should be fixed in the light of labor productivity, the
prevailing wage rates in the same or neighbouring areas and relative importance of
jobs. Managers salaries and allowances are expected to be linked with their
responsibility, initiative and skill. But the spread between minimum wages and
highest salaries should be reasonable. Employees are expected to build up and
maintain harmonious relationships between superior and subordinates. Another
aspect of responsibility towards employees is the provision of welfare amenities
like safety and security of working conditions, medical facilities, housing, canteen,
leave and retirement benefits.
Responsibility towards consumers:
In a competitive market, serving consumers is supposed to be a prime concern of
management. But in reality perfect competition does not prevail in all product
markets. In the event of shortage of supply there is no automatic correction.
Besides consumers are often victims of unfair trade practices and unethical conduct
of business. Consumer interests are thus protected to some extent with laws and
pressure of organized consumer groups. Management should anticipate these
developments, satisfy consumer needs and protect consumer interests. Goods must
be of appropriate standard and quality and be available in adequate quantities at
reasonable prices. Management should avoid resorting to hoarding or creating
artificial scarcity as well as false and misleading advertisements.
Responsibility towards the Governments:
As a part of their social responsibility, management must conduct business affair in
lawful manner, honestly pay all the taxes and dues, and should not corrupt public
officials for selfish ends. Business activities must also confirm to the economic and
social policies of the government.
Responsibility towards the community and society:
The socially responsible role of management in relation to the community are
expected to be revealed by its policies with respect to the employment of
handicapped persons, and weaker sections of the community, environmental
protection, pollution control, setting up industries in backward areas, and providing
relief to the victims of natural calamities etc.
Social responsibility towards our employees
More than a thousand workers are directly employed or assigned by subcontractors
at Bulyard Shipbuilding Industry EAD.
Despite the extremely volatile economic environment the enterprise always puts
efforts for assuring favourable working environment and building teams as well as
balancing between work and private life of the employees and encouraging higher
results. This is boosted by setting up, carrying out and attendance of diverse events
for different occasions.
Bulyard carries out career planning by means of courses, training, incl. indoor, for
the employees and workers, apprenticeship, probation for students and pupils of
vocational schools and universities (Varna Technical University, Naval Academy,
Varna, Nautical School, Varna) in order to let them get awareness of the facilities
and the process. The attendance of different specialized courses and indoor training
are arranged in case of necessity.
Social responsibility towards the environment
The environmental protection related responsibilities are assigned to persons in
charge of this particularly.
One of the related assignments is the collection of data on the quantitative impact
of the work process of the shipyard on the environment such as toxic gas and dust
emissions, consumption of power, water, consumables, recycling etc. We do
commit ourselves to strictly follow, be acquainted with and observe the
environment related legislation regulations.
Being socially responsible company, Bulyard takes account of the presence of
ecological risk when taking new projects and investments.
In relation to the environmental protection activity, by virtue of orders, all
employees, workers and subcontractors are obliged to keep their working stations
tidy and to keep the environment clean. The company is pursuing ways of
diminishing the toxic emissions, encouraging the efforts for saving renewable and
non-renewable sources.
Serious factor influencing on the research process and determining the choice for
new suppliers and subcontractors is the environmental protection commitment. The
company expects from the subcontractors to follow the environmental protection
policy and power and water sources conservation. In addition to the existing
company practices, Bulyard undertakes financial support of different ecology
related causes, affecting not only the company territory but also the community as
a whole.
Ethics and responsibility towards the interested parties
As a socially responsible company Bulyard’s stand determines the significance of
all interested parties, namely subcontractors, employees, clients, competitors, state
bodies, regulating the relevant activities (for instance Regional Inspectorates of
Environment and Water). The shipyard tolerates transparency and correct attitude
and expects back even amount of clarity, equity and loyalty. By means of the
bunch of measures in this aspect the shipyard strive to do their best to keep balance
between their interests and those of all the interested parties. From this point of
view the stand of the relevant audiences towards the corporate social responsibility
is important to us. This inevitably helps for building up mutual credit. If necessary
the CSR related issues are discussed on symposia, seminars, fairs, meetings
(including meetings of BULNAS with the participation of the members of the
association), at meetings with potential subcontractors and partners, in written
correspondence, circulars, company orders and reports.
Participations in socially significant projects
The commitment to keep the environment clean incl. erection of a treatment plant,
replacement of water supply installation etc., support of a number of initiatives and
events important to the region and preservation of the employment, facilitate the
entire activity of Bulyard towards participations in socially significant and useful
projects.
Charity
We sympathize with our employees’ lives and the society in general. We care
about their health by collecting funds and arrangement of campaigns to help
employees and workers of Bulyard in dire straights, collecting money for orphans
and homeless and neglected children, financial support to organizations and
institutions.
Barriers in enforcement of Social Responsibilities
Social responsibility has certain costs. It's not the natural thing to be responsible.
Greed and selfishness work against social responsibility. When greed and
selfishness become higher values, social responsibility goes out the window.
One of the problems with our culture is that we worship wealth. People who have a
lot of money are heroes to us and we strive to emulate them. We see wealth and
power as an indicator of merit and virtue. But people who are rich and want to be
richer, and corporate and industrial leaders whose jobs are to put the prosperity of
their companies at the top of their priorities, often trivialize social responsibility,
and this sets the tone for the whole culture.
The arguments against social responsibility are that it costs too much; it's a drag on
the economy, that it provides a negative incentive by cushioning failure, etc.
Evolution of social responsibility in India
The evolution of social responsibility in India refers to changes over time in
India of the cultural norms of corporations' engagement of corporate social
responsibility (CSR), with CSR referring to way that businesses are managed to
bring about an overall positive impact on the communities, cultures, societies and
environments in which they operate.[1] The fundamentals of CSR rest on the fact
that not only public policy but even corporates should be responsible enough to
address social issues. Thus companies should deal with the challenges and issues
looked after to a certain extent by the states.[2]
Among other countries India has one of the most richest traditions of CSR Much
has been done in recent years to make Indian Entrepreneurs aware of social
responsibility as an important segment of their business activity but CSR in India
has yet to receive widespread recognition. If this goal has to be realised then the
CSR approach of corporates has to be in line with their attitudes towards
mainstream business- companies setting clear objectives, undertaking potential
investments, measuring and reporting performance publicly.
The Four Phases of CSR Development in India
The history of SR in India has its four phases which run parallel to India's
historical development and has resulted in different approaches towards CSR.
However the phases are not static and the features of each phase may overlap other
phases.
The First Phase
In the first phase charity and philanthropy were the main drivers of CSR. Culture,
religion, family values and tradition and industrialization had an influential effect on
CSR. In the pre-industrialization period, which lasted till 1850, wealthy merchants
shared a part of their wealth with the wider society by way of setting up temples
for a religious cause Moreover, these merchants helped the society in getting over
phases of famine and epidemics by providing food from their godowns and money
and thus securing an integral position in the society. With the arrival of colonial
rule in India from 1850s onwards, the approach towards CSR changed. The
industrial families of the 19th century such as Tata, Godrej, Bajaj, Modi, Birla,
Singhania were strongly inclined towards economic as well as social
considerations. However it has been observed that their efforts towards social as
well as industrial development were not only driven by selfless and religious
motives but also influenced by caste groups and political objectives.
The Second Phase
In the second phase, during the independence movement, there was increased
stress on Indian Industrialists to demonstrate their dedication towards the progress
of the society. This was when Mahatma Gandhi introduced the notion of
"trusteeship", according to which the industry leaders had to manage their wealth
so as to benefit the common man. "I desire to end capitalism almost, if not quite, as
much as the most advanced socialist. But our methods differ. My theory of
trusteeship is no make-shift, certainly no camouflage. I am confident that it will
survive all other theories." This was Gandhi's words which highlights his argument
towards his concept of "trusteeship". Gandhi's influence put pressure on various
Industrialists to act towards building the nation and its socio-economic
development.[4] According to Gandhi, Indian companies were supposed to be the
"temples of modern India". Under his influence businesses established trusts for
schools and colleges and also helped in setting up training and scientific
institutions. The operations of the trusts were largely in line with Gandhi's reforms
which sought to abolish untouchability, encourage empowerment of women and
rural development.
The Third Phase
The third phase of SR (1960–80) had its relation to the element of "mixed
economy", emergence of Public Sector Undertakings(PSUs) and laws relating
labour and environmental standards. During this period the private sector was
forced to take a backseat. The public sector was seen as the prime mover of
development. Because of the stringent legal rules and regulations surrounding the
activities of the private sector, the period was described as an "era of command and
control". The policy of industrial licensing, high taxes and restrictions on the
private sector led to corporate malpractices. This led to enactment of legislation
regarding corporate governance, labour and environmental issues. PSUs were set
up by the state to ensure suitable distribution of resources (wealth, food etc.) to the
needy. However the public sector was effective only to a certain limited extent.
This led to shift of expectation from the public to the private sector and their active
involvement in the socio-economic development of the country became absolutely
necessary. In 1965 Indian academicians, politicians and businessmen set up a
national workshop on CSR aimed at reconciliation They emphasized upon
transparency, social accountability and regular stakeholder dialogues. In spite of
such attempts the CSR failed to catch steam.
The Fourth Phase
In the fourth phase (1980 until the present) Indian companies started abandoning
their traditional engagement with CSR and integrated it into a sustainable business
strategy. In 1990s the first initiation towards globalization and economic
liberalization were undertaken. Controls and licensing system were partly done
away with which gave a boost to the economy the signs of which are very evident
today. Increased growth momentum of the economy helped Indian companies
grow rapidly and this made them more willing and able to contribute towards
social cause. Globalization has transformed India into an important destination in
terms of production and manufacturing bases of TNCs are concerned. As Western
markets are becoming more and more concerned about and labour and
environmental standards in the developing countries, Indian companies who export
and produce goods for the developed world need to pay a close attention to
compliance with the international standards.
Current State of CSR in India
As discussed above, CSR is not a new concept in India. Ever since their inception,
corporates like the Tata Group, the Aditya Birla Group, and Indian Oil
Corporation, to name a few, have been involved in serving the community.
Through donations and charity events, many other organizations have been doing
their part for the society. The basic objective of CSR in these days is to maximize
the company's overall impact on the society and stakeholders. CSR policies,
practices and programs are being comprehensively integrated by an increasing
number of companies throughout their business operations and processes. A
growing number of corporates feel that CSR is not just another form of indirect
expense but is important for protecting the goodwill and reputation, defending
attacks and increasing business competitiveness.
Companies have specialized CSR teams that formulate policies, strategies and
goals for their CSR programs and set aside budgets to fund them. These programs
are often determined by social philosophy which have clear objectives and are well
defined and are aligned with the mainstream business. The programs are put into
practice by the employees who are crucial to this process. CSR programs ranges
from community development to development in education, environment and
healthcare etc.
For example, a more comprehensive method of development is adopted by some
corporations such as Bharat Petroleum Corporation Limited, Maruti Suzuki India
Limited, and Hindustan Unilever Limited. Provision of improved medical
and sanitation facilities, building schools and houses, and empowering the villagers
and in process making them more self-reliant by providing vocational training and
a knowledge of business operations are the facilities that these corporations focus
on.Many of the companies are helping other peoples by providing them good
standard of living.
On the other hand, the CSR programs of corporations like GlaxoSmithKline
Pharmaceuticals’ focus on the health aspect of the community. They set up health
camps in tribal villages which offer medical check-ups and treatment and
undertake health awareness programs. Some of the non-profit organizations which
carry out health and education programs in backward areas are to a certain extent
funded by such corporations.
Also Corporates increasingly join hands with Non-governmental
organizations (NGOs) and use their expertise in devising programs which address
wider social problems.
For example, a lot of work is being undertaken to rebuild the lives of the tsunami
affected victims. This is exclusively undertaken bySAP India in partnership
with Hope Foundation, an NGO that focuses mainly on bringing about
improvement in the lives of the poor and needy . The SAP Labs Center of HOPE in
Bangalore was started by this venture which looks after the food, clothing, shelter
and medical care of street children.
CSR has gone through many phases in India. The ability to make a significant
difference in the society and improve the overall quality of life has clearly been
proven by the corporates. Not one but all corporates should try and bring about a
change in the current social situation in India in order to have an effective and
lasting solution to the social woes . Partnerships between companies, NGOs and
the government should be facilitated so that a combination of their skills such as
expertise, strategic thinking, manpower and money to initiate extensive social
change will put the socio-economic development of India on a fast track.
Examples
The first company that comes to mind as a beacon of good corporate governance is
the Indian IT industry bellwether, Infosys. Indeed, Infosys is one of the companies
that has set benchmarks for other companies not only in India but all over the
world in the way corporate governance and social responsibility are handled and
projected to the outside world. The point here is that companies not only need to
walk the talk for CSR but also broadcast their achievements to the world at large.
Another company that has done an exceptional job of portraying itself as a good
corporate citizen is the TATA group in India and The Body Shop (formerly owned
by Anita Roddick) company in the United States.
While these two companies are at different ends of the spectrum as far as their
product lines and lines of business are concerned, the public perceives these
companies favourably mainly due to the visionary leaders that have led these
companies as well as the reputation that has been established through decades of
doing the right thing. Taken together with Infosys and companies like Sony
Ericsson, these corporations reap the benefits of being good corporate citizens in
terms of increased revenues and top of the mind brand recall by dint of being
model corporate citizens.
The key take away from this discussion is that companies do gain tangible and
intangible benefits by practising CSR and by projecting an image of good
governance and social responsibility to the external world. Of course, we have seen
how companies resort to “Green Washing” and spin to project something which
does not exist fully or partially. The point about these examples is that these
companies not only pursue socially and environmentally responsible strategies but
also make it a point to be on cordial terms with all the stakeholders (the suppliers,
governmental agencies, employees, consumers and society at large) which
translates into measurable and immeasurable benefits to these companies.
Finally, being a good corporate citizen brings its own benefits to the companies.
For instance, it is common to find leaders from these companies sitting on various
boards and advisory committees which speak volumes about the high esteem in
which they are held. This translates into instant recognition and a “halo” effect
which for all practical purposes is like the adulation that rock stars and sports
personalities receive from the people. The point here is that good corporate
behavior is rewarded at some point or the other and hence, companies must seek to
do well and do the right thing always. While not preaching, some of these
companies also help other companies in actualizing their visions for society and by
being transformational change agents as well as catalysts for CSR.
In conclusion, CSR as a business imperative must not be accepted grudgingly or
half heartedly. Instead, it must be practiced with full vigor and straight from the
heart passion and this certainly helps the companies in the long run. After all,
business is not all about the next quarter only.
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