Corporate social responsibility is not a new concept in India . However, what is new is the shift in focus from making profits to meeting societal challenges.
Giving a universal definition of corporate social responsibility is bit difficult as there is no common definition as such.
However, there are few common threads that connect all the perspectives of CSR with each other; the dedication to serve the society being most important of them. Most ideal definition of corporate social responsibility (CSR) has been given by world business council for Sustained Development which says, "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".
Thus, the meaning of CSR is twofold. On one hand, it exhibits the ethical behavior that an organization exhibits towards its internal and external stakeholders (customers as well as employees). On the other hand, it denotes the responsibility of an organization towards the environment and society in which it operates.
Benefits of Corporate Social Responsibility
Corporate social responsibility offers manifold benefits both internally and externally to the companies involved in various projects. Externally, it creates a positive image amongst the people for its company and earns a special respect amongst its peers. It creates short term employment opportunities by taking various projects like construction of parks, schools, etc. Working with keeping in view the interests of local community bring a wide range of business benefits. For example, for many businesses, local customers are an important source of sales. By improving the reputation, one may find it easier to recruit employees and retain them. Businesses have a wider impact on the environment also. Plantation and cultivation activities taken up by Intel India are a step towards the same. Recycling used products also acts as a step towards minimizing wastes.
Internally, it cultivates a sense of loyalty and trust amongst the employees in the organizational ethics. It improves operational efficiency of the company and is often accompanied by increases in quality and productivity. More importantly, it serves as a soothing diversion from the routine workplace practices and gives a feeling of satisfaction and a meaning to their lives. Employees feel more motivated and thus, are more productive. Apart from this, CSR helps ensure that the organization comply with regulatory requirements.
CSR Importance and its Relevance Today
The amount of information available to customer about the company, product, brand globally through easy accessible and available mode of information; internet, communication, customer wants to buy product from trusted brand, employee want to work for the company who respect them, NGO's want to work with company who work with the same vision for the benefit of the people. As said by Peter Duker "The 21st century will be the century of the social sector organization. The more economy, money, and information become global, the more community will matter." (Corporate watch report, 2006).
According to strategic corporate social responsibility by William B. Werther, David Chandler there is three trends which are going to have importance in future are
Increasing Affluence : Customer from elite level can afford to buy and pay more for premium brand but the poor customer might not be willing to pay so much for brand, instead they would prefer to spend their money on business which can take their business to much better level.
Changing social expectation : Its natural that customer expect more from the company whose product they buy but with recent controversy and scandal of company has reduced the trust and confidence in the regulatory body and organization which manage the corporate.
Globalization and free flow of Information : With growing trend of media and easy access to information through mobile, TV even the minor mistake of the company is brought in public in no time, this sometime fuels the activist group and likeminded people to spread message which can lead to situation like boycott of the product.
There can be few key steps to implement CSR successfully (Corporate Social Responsibility, 2003 )
• Better communication between top management and organization
• Appoint for CSR position.
• Good relationship with customer, supplier, stakeholder.
• Annual CSR audit.
• Feedback process
It can be concluded that in today's informative world where information are readily available to general public CSR has been an important part of any organization to be successful. Organization in present world cannot be successful without taking into account the social responsibility. CSR has been a vital component for any organization to have perpetual success and to create brand.