In today’s socially conscious environment, employees and customers place a premium
on working for and spending their money with businesses that prioritize corporate
social responsibility (CSR).
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CSR is an evolving business practice that incorporates sustainable development into a
company’s business model. It has a positive impact on social, economic and
environmental factor
CSR in International Business
A popular definition of CSR comes from the World Business Council for Sustainable
Development which states that it is
“the continuing commitment by business to behave ethically and contribute to
economic development while improving the quality of life of the workforce, their
families and the local community and society at large.”
CSR initiatives engaged in by
Multinational companies
CSR initiatives engaged in by Multinational companies(MNCs) can be categorised
thus:
CSR for global talent acquisition and retention
CSR for branding and reputation management
CSR as regulatory requirement
CSR as philanthropic engagement/initiative
- CSR for global talent acquisition and
retention
The basis for CSR as a strategy for acquiring and retaining global talent for MNCs is
that in both theory and practice it has been observed that just as companies succeed in
the market by fulfilling the needs of the irrespective customer base, they can manage
their employees best by viewing them as internal customers, fulfilling their needs
through a compelling menu of “job products”.
By engaging in CSR initiatives that are both specific and relevant, the values of company are revealed and as such, its values can act as an “Employee Value Proposition”which is “the holistic sum of everything people experience and receive while they are a part of a company.” This can be effective in building and sustaining a talented employee base.
- CSR for branding and reputation
management
CSR can impact companies’ reputation positively, helping them improve their reputation with stakeholders and be more resilient in times of crisis. Still, companies need to work hard to make sure stakeholders are aware of their efforts and that these efforts are sincere. Only then the promise of CSR-reputation relationships can be fully realized.
- CSR as regulatory requirement
CSR regulation by government may come in the form of requiring that Environmental
Impact Assessment report be produced before any development that would have a major impact on the environment and communities around it is carried out detailing measures that would be taken to mitigate its adverse effects.
- CSR as
philanthropic engagement/initiative
the context of CSR as a philanthropic engagement and initiative of charity can better be understood. CSR, as many have argued, is not corporate philanthropy as in giving money away just because of some sentimental reasons, given that there is an overflow of financial capabilities; CSR is about giving back to the community voluntarily and in a mutually
beneficial way, yet not totally within the remit of business activities. CSR is an engagement in enlightened self-interest. Organizations make long-term investments usually buying intangible investments in the long run by making tangible payments in the near term.
“Companies are finding an increasing need to depend on value adding activities such as corporate philanthropy in order to distinguish themselves from their competitors and cultivate goodwill among st their stakeholders. The money they plough into philanthropic activities should not be viewed as a sunk cost. Instead companies should view it as an investment for the good of the overall firm”
Policy implication of CSR
Good CSR practices need framing of code of conduct
CSR practice need legal back up, apart from voluntary philanthropy
CSR should be synergy of government -private –social organizations
- Good CSR practices need framing of
code of conduct
Framing ‘Code for good CSR practices’ requires extensive deliberations among various stakeholders. The key stakeholders are management of corporate entity/body, employees of corporate body, government regulatory authority, members of community and Non-Governmental organizations.
The process for development of ‘Code for good CSR practices’ may commence with a discussion session on CSR during regular training /orientation/on-job training programmes taken by the corporate body/company.
- CSR practice need legal back up, apart
from voluntary philanthropy:
Although the forced changes do not bring lasting solution, there is need for consensus on basic objectives and purposes of CSR and common strategy for the same. Once this consensus is achieved, law makers can work for necessary amendment in Companies Act and CSR may be made compulsory for all corporate citizens (provided they have profit). Such legal sanctity may boost CSR activities in the country.
- CSR should be synergy of government
-private –social organizations
Government, Business Associations (CII, FICCI etc.), Spiritual organizations,
Gandhian Institutions and other social organizations may come together to form the lasting strategy for effective CSR.
It would be ideal if government fund is supplemented by fund provided for CSR activities by corporate bodies. It will have ‘synergy effect’. Such an approach would be in line with Gandhian Principle of Trusteeship. However, the association should be voluntary. Non- Governmental Organizations (NGOs), too, may be made party to such association. All three agencies – Government or their Agencies, NGOs and
Corporate bodies, will work together to make the society prosper
