Marketing and Human Resource Management

COMPILED BY : PRATIK KOTHARI TY BCOM. C 307

INDEX
1. What is corporate social responsibility 2. History behind CSR 3. Top 5 CSR companies 4. Benefits of CSR 5. Disadvantages of CSR 6. Why should CSR be made mandatory 7. Why shouldnt CSR be made mandatory 8. Case study: CADBURY 9. Conclusion

WHAT IS CORPORATE SOCIAL RESPONSIBILITY?

CSR is a process with the aim 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. CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives.

HISTORY BEHIND CSR?

The phrase corporate social responsibility was first coined in 1953 with the publications of Bowens social responsibility of Businessmen. The evolution of CSR is as old as trade and business for any of corporations. Industrialization and impact of business on the society led to a completely new vision. By 80s and 90s academic CSR was taken into consideration. The first company to implement CSR was shell in 1998.

1990 was CSR as a standard industry with companies like price water house copper and KPMG. CSR evolved beyond code of conduct and reporting it started taking initiatives in NGOs.

LIST OF TOP 5 CSR COMPANIES.

1. Microsoft 2. Google 3. Walt Disney 4. BMW 5. Apple

BENEFITS OF CSR
Corporate social responsibility has many benefits that can be applied to any business, in any region and at a minimal cost. Improved financial performance: A recent longitudinal Harvard University study has found that stakeholder balanced companies showed four times the growth rate and eight times employment growth when compared to companies that focused only on shareholders and profit maximization. Enhanced brand image & reputation: A company considered socially responsible can benefit -both by its enhanced reputation with the public, as well as its reputation within the business community, increasing a companys ability to attract capital and trading partners. For example, a 1997 study by two Boston College management professors found that excellent employee, customer and community relations are more important than strong shareholder returns in earning corporations a place an Fortune magazines annual Most Admired Companies list.

Increased sales and customer loyalty: A number of studies have suggested a large and growing market for the products and services of companies perceived to be socially responsible. While businesses must first satisfy customers key buying criteria such as price, quality, appearance, taste, availability, safety and convenience. Studies also show a growing desire to buy based on other value-based criteria, such as sweatshop-free and child laborfree clothing, products with smaller environmental impact, and absence of genetically modified materials or ingredients.

Increased ability to attract and retain employees: Companies perceived to have strong CSR commitments often find it easier to recruit employees, particularly in tight labor markets. Retention levels may be higher too, resulting in a reduction in turnover and associated recruitment and training costs. Tight labor markets as well the trend toward multiple jobs for shorter periods of time are challenging companies to develop ways to generate a return on the consideration resources invested in recruiting, hiring, and training.

Reduced regulatory oversight: Companies that demonstrate that they are engaging in practices that satisfy and go beyond regulatory compliance requirements are being given less scrutiny and freer reign by both national and local government entities. In many cases, such companies are subject to fewer inspections and paperwork, and may be given preference or fast-track treatment when applying for operating permits, zoning variances or other forms of governmental permission.

Easier access to capital: The Social Investment Forum reports that, in the U.S. in 1999, there is more than $2 trillion in assets under management in portfolios that use screens linked to ethics, the environment, and corporate social responsibility. It is clear that companies addressing ethical, social, and environmental responsibilities have rapidly growing access to capital that might not otherwise have been available.

BENEFITS OF CSR TO THE SOCIETY

Public Relations. Each CSR effort can offer many public relations and media opportunities. Example: If a company makes a donation to a community service project, they would likely send a press release to relevant media outlets. Their story could be picked up and included in publications, broadcasts and online news sites, thereby spreading their company message in several directions for little additional cost. Follow up stories showing how the donation has made an impact can amplify and extend the life of the company's message in the media.

Human Resources. Corporations that can demonstrate their commitment to the social good can be attractive to top talent who share their set of values. For example, Generation Y (also known as the Millennial Generation) is often identified as a very civic minded population who would be attracted to employers with socially responsible values.

Expanded Customer Prospect Base. While most buyers buy on "value," there are some groups of customers that buy on "values." This is particularly the case for union organizations and many non-profits. An example would be labor unions who traditionally buy made in the USA and union made goods in support of fellow union members. Another example would be a non-profit for children that buys fair trade merchandise to avoid potential scandals from purchasing goods made with sweatshop or child labor. Green initiatives may also steer buyers into purchasing recycled or biodegradable products.

If your company offers a product or service that can legitimately be classified under one of the social responsibility categories, you can attract buyers whose buying specifications demand it. You can thereby effectively position yourself as go-to source when it comes to these buys.

Building a Positive Workplace Environment Finally, one of the greatest benefits of promoting social responsibility in the workplace is the positive environment you build for your employees. When employees and management feel they are working for a company that has a true conscience, they will likely be more enthusiastic and engaged in their jobs. This can build a sense of community and teamwork which brings everyone together and leads to happier, more productive employees.

Disadvantages of CSR

Role of Profit One of the biggest features addressed by CSR is its intent to cause companies to recognize responsibilities to stakeholders outside of shareholders. This includes customers, communities, employees and suppliers. While proponents of CSR point out the long-term benefits of taking care of these core relationships, shareholders are often deterred at the notion that companies will invest in anything that does not create immediately obvious financial gain. With CSR, detecting measurable bottom line benefits is a challenge as social and environmental programs are hard to account for with regard to financial gain.

Competitive Disadvantage One of the most common arguments companies make when indicating reluctance to CSR policies is the disadvantage it causes against companies that do not. In other words, if company A does its part to invest resources to take care of its communities and the environment and company B does not, company B retains its resources, including money, for other business pursuits. Thus, without strict adherence industry wide, some companies argue that they cannot fall behind by putting money into CSR programs.

Loss of Focus A main driver at the onset of CSR was increased interest in making the customer a primary focus of business operations. This coincides with continued realization that customer retention and loyalty are keys to long-term business success. Detractors of CSR as a major component of corporate governance argue that guidelines have expanded beyond this basic initial emphasis. David Vogel points out in his "CSR Doesn't Pay" article for Forbes, that many companies that abide by CSR guidelines do so more from fear of public backlash than because they believe it is good for long-term business performance. He adds that most parties generally agree that taking care of customers is good in the long run, but expensive requirements in human rights, environmental sustainability and community development are too much to ask of many companies. Lasting Impact How long CSR will remain a prominent business concern is a common question asked by those who argue against CSR as a major concern with corporate governance. According to the My Efficient Planet website, CSR has existed for more than 50 years. However, its prominence as a major business consideration has certainly increased in the 21st century due to heightened awareness of ethical issues in business and environmental preservation standards. Detractors argue that CSR emphasis is a short-term fad in response to prominent scandals like Enron, and current interest in green-friendly practices.

WHY SHOULD CSR BE MADE MANDATORY?

Higher customer satisfaction CSR improves the attitude of customers towards the organization. Customers prefer buying goods and services from those companies having good CSR image and will be less willing to switch brands again and again. Satisfied employees An employee with positive attitude wont look up for different jobs because he is proud of working in an organization having good social responsibility. A company having good CSR will be receiving more job applications because of better workplace. More business opportunities A company or an organization should be in constant contact with its customers, suppliers and other parties. Only then will the company get more opportunities. Long term business sustainability Business ventures start off with long term perspectives. But soon get drawn to short term profit seeking. Having a CSR program counters short termism and includes long term sustainability through constant interaction with various stakeholders.

Some benefits the company would receive if CSR is made mandatory would include: Differentiation of the company with its competitors, Boost to innovation and learning, Improves business reputation CSR helps to ensure you comply with regulatory requirements Activities such as involvement with local community are ideal opportunities to generate positive press coverage

WHY CSR SHOULDNT BE MANDATORY??

Its not the responsibility of the business houses The provision to make CSR spending mandatory is more of an intrusion and it is apparent that by doing so the government is trying to abdicate itself of its social responsibilities. It is the responsibility of the government to take up the charge of the social factors rather then thrusting them on the corporate sector by making CSR mandatory. Causes diversification in the objective of profit maximization Some critics believe that corporate social responsibility can be an exercise in futility. A company's management has a fiduciary duty to its shareholders, and CSR directly opposes this a corporation's purpose is to maximize returns to its shareholders, and that since only people can have social responsibilities, corporations are only responsible to their shareholders and not to society as a whole. In addition mandatory CSR increases paperwork of the company and creates an additional burden on them. It diverses the goal from profit maximization to social responsibility. Increases businesss hold on the society Indian corporate led by Tatas and Birlas have been voluntarily investing in CSR. Investing in CSR increases business hold on the society as they now contribute in both financial and corporate sector of the society. It leads to more control and domination by the business houses in d society resulting in mismanagement and corruption.

 Sources of funding is an issue For most of micro, small and medium enterprises operating in the society the source of funding could be an issue since their revenues are relatively smaller in value than multinationals and large corporations. In such a case mandatory CSR will just prove to be a burden on them and reduce their income considerably. In essence CSR should be done with passion and dedication, and not because it is thrust upon.

CASE STUDY: INFOSYS

ABOUT INFOSYS INDIA: Infosys (formerly Infosys Technologies) is an Indian multinational provider of business consulting, information technology, software engineering and outsourcing services. It is headquartered in Bangalore, Karnataka. Infosys is the third-largest India-based IT services company by 2012 revenues, and the second largest employer of H-1B visa professionals in the United States, as of 2012. On 28 March 2013, its market capitalization was $30.8 billion, making it India's sixth largest publicly traded company. Major CSR Activities: Blood donation More than 80 Infoscions donated blood in a special camp conducted in collaboration with the Mysore Rotary and Chandrakala Hospital. Disability Rakum School for the visually challenged: Mitr, our local CSR team, visited the Rakum School for the visually challenged. Mobility, an exercise in which team members walked blindfolded using canes, helped them empathize with the children. The team organized games and distributed chocolates and stationery. Infoscions partner with Nethrodaya, an NGO that works with visually challenged children. Our volunteers regularly conduct weekend reading sessions. In 2009, we organized a South India inter-state sports festival with modified versions of cricket, volleyball and chess. In 2006 and 2007, Infosys BPO received the Helen Keller award for the best employer from the National Centre for Promotion of Employment for Disabled People (NCPEDP).

 Disaster-relief The Foundation has always stepped in and contributed to relief work after a natural disaster. Late in 2004, the tsunami that struck South Asia left in its wake a trail of death and destruction. The Foundation helped victims in Tamil Nadu and the Andamans at various stages. Initially, food, utensils and clothes were distributed. But after assessing the needs of those affected, a survival kit was put together, which included essential supplies and medicines. More than 1,500 kits were distributed in six villages of Tamil Nadu. Foundation volunteers also camped in the region and helped out in various other activities. Based on feedback from the locals, essential clothing was distributed in the Andaman Islands. The generous donations that poured in from both within and outside the organization helped the Foundation carry out its work. Education Sneham, our local CSR team, manages a dedicated intranet portal to help employees support education of the children of our housekeeping and security staff. In 2009, 1,500 members contributed approximately Rs. 14,00,000 to support more than 370 students. Meritorious students were awarded for their performance. A special award was presented to a girl child with exceptional recitation skills.

Conclusion

CSR is based on the question of good business for a good society today and tomorrow. Its not about charity its about how companies earn their profits and not how they spend it. It takes employees of integrity and a corporate structure it is a matter of individual and company ethics. Politics continue to play an important role but in a world of globalization the effects of regulation can be limited. Soft laws and new government mechanisms are based on companys self commitments.