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Corporate Social Responsibility Management in India

Corporate Social Responsibility Management in India

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Published by k gowtham kumar

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Published by: k gowtham kumar on Feb 26, 2011
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Corporate Social Responsibility Management In India
In India companies have rapidly introduced innovative and diversified ideas in thefield of social responsibility in recent years. In India, slowly but steadily, the Indiancompanies are moving towards fulfillment of their corporate social responsibility.For each business, different measures are taken in consideration to classify abusiness as "socially responsible". Each business attempts to reach different goals.There are four areas that should be measured regardless of the outcome needed:Economic function, Quality of life, Social investment and Problem solving that istrying to be achieved should be measured to see if it meets with the cost guidelinesthat the business is willing to contribute.
Social responsibility is an ethical or ideological theory that an entity whether it is agovernment, corporation, organization or individual has a responsibility to society atlarge. This responsibility can be "negative", meaning there is exemption from blameor liability, or it can be "positive," meaning there is a responsibility to actbeneficently (proactive stance).Businesses can use ethical decision making to secure their businesses by makingdecisions that allow for government agencies to minimize their involvement with thecorporation. For instance if a company is proactive and follows the United StatesEnvironmental Protection Agency (EPA) guidelines for emissions on dangerouspollutants and even goes an extra step to get involved in the community and addressthose concerns that the public might have; they would be less likely to have the EPAinvestigate them for environmental concerns. "A significant element of currentthinking about privacy, however, stresses "self-regulation" rather than market orgovernment mechanisms for protecting personal information"
. Most rules andregulations are formed due to public outcry, if there is not outcry there often will belimited regulation.
Corporate social responsibility is a much misunderstood concept. It contradicts thecorporate objectives of profit motive. But it is difficult to overlook the prime objectiveof the business for the purpose of '
do good activity'
. Today consumer is not onlyready to accept the role of a corporate house only to satisfy their demand to producethe goods according to their requirement. According to
Kotler and Lee
-it is
" acommitment to improve community well being through discretionarybusiness practices and contributions of corporate resources."
The world business council on Sustainable Development has defined corporate socialresponsibility as the "
commitment of business to contribute to sustainableeconomic development, working with employees, their families, the localcommunity and society at large to improve their quality of life." It is thebackbone of today's business sustainability.
Kotler cites several benefits of corporate social initiatives on the part of corporate. It includes-1) Increase in sales
2) Increase in market share3) Strengthened brand positioning4) Improve corporate image5) Increased appeal for customers, employees and investors6) Reduced operating costAs
is necessary to fulfill the unfulfilled business operation and long termprofitability as well as sustainability by meeting the ethical, legal, commercial andpublic expectation that society has from business.
It's possible that people become leaders of major businesses with the full intention of earning money in the most unethical, disreputable way possible. But more likely,they don't. Companies end up doing the wrong things for a variety of reasons - noneof which necessarily begin with evil intent.The four factors that often create irresponsible businesses:
Believing that you are protected from consequences 
The phrase 'too big to fail' is the most recent illustration of this factor. Itcomes from an irrational belief that the status quo is more fixed and reliablystable than logic might suggest - and that therefore decisions are made thatonly make sense if that status quo persists.It's ironic that businesses are, in theory, the types of human organization thatare most adaptable to change, and many of which have succeeded byexploiting or creating change in a way that helped them overtake slowermoving competitors. And yet, the natural human state is to resist change -and it keeps getting in the way for all businesses.It's the difference between seeing climate change as a logical basis why thebusiness environment is going to radically change in coming years - with allthe threats and opportunities that implies - or seeing it as a potentialadditional cost imposed by legislation, the solution to which is to lobbyagainst that legislation.When the dot com bubble was in full swing, there were plenty who werepointing out that market sentiment was drifting into irrational territory. Theway some companies were being valued just did not make sense on anytraditional measure. But people did not want to be left out because, on theway logic seemed to be working, all you had to do was climb aboard thegravy train in order to get fabulously rich.Likewise, the application of this logic to the recent financial crisis was bestsummed up by the now-famous quote by Chuck Prince, former CEO of 
Citigroup, who said at that time: "When the music stops, in terms of liquidity,things will be complicated. But as long as the music is playing, you've got toget up and dance. We're still dancing". The music stopped. He lost his job,and so did many, many others.By the way, stakeholder engagement should be one of the routes that can betaken to addressing this problem. Good quality stakeholder engagement isabout putting you in touch with the potential consequences of your decisions.It's not always the way it's practiced, however.
Building a business model that depends on customer ignorance 
Banks and insurance companies have made plenty of profit in recent decadeson the principle that their customers don't understand the complex detailsbehind some of the products that they buy. Therefore there is not so muchdownward pressure on price, and customers often don't choose optimalproducts for their circumstances.In the UK, this has led the government and regulators on a never-endingquest to provide the right tools to force the companies to clean up. This hastaken the form of the 'treating customers fairly' initiative. The trouble withthis is that it is pretty much impossible to avoid the situation where acompany can sell a sub-optimal product.On the rare occasions a senior executive from one of these companies to talkfrankly about the dilemma, they will admit that so long as the rest of theindustry is benefiting from customer ignorance, there is no market logic forthem to call time on the practice. It is genuinely one of those areas where themarket fails to reward good behavior. So they keep dancing until someoutside agency pulls the plug.
Becoming so absorbed in the micro-reality of the business to fail to see the bigger picture
Everyone is complaining about how the bankers seem to be out of touch withreality with their addiction to eye-watering bonuses. Most people at higherlevels in business are as well - it's just that the micro-reality around theirbusiness sector isn't so far removed from what seems reasonable to the widerpopulation.People get caught in a world made up of their own beliefs, the things thatthey see, and the terms of reference that make sense to their own values.But for senior business leaders, the impact is more powerful. Because they goto work in their chauffeur driven cars. Because correspondence is screenedbefore being passed to them. Because they deal with macro-figures, and goto lots of networking events where they exclusively meet people likethemselves working in the same industry.People that perform get well paid. People that fail get sacked. That seems tothem to be self-evidently the right operation. If some people believe that thisis changed by the fact that millions have lost their job, that financial

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