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090219_Time to Make CSR More Strategic

090219_Time to Make CSR More Strategic

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Published by: The CSR Digest on Feb 27, 2009


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The CSR D Digest
Exploring t Corporate Co the onscience

The CSR Digest offers quality content on R q corporat social respon te nsibility (CSR) and sustaina able and respon nsible investment (SRI). The CSR Digest ex xplores the corporat conscience worldwide, with a te w special e emphasis on Ma alaysia and the Asia Pacific Rim. For ou editorial ur content, clickhere. The Digest is also currently a free distribu y ution electronic c digest, s feel free to send your conte so ent or press releases to us at editor [at] csrdiges dot com . st

Time to make CSR Mo Strat e ore tegic
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By Sure Kr Pram esh mar The cur rrent global financial cr risis has impacted Corporate Social R Responsibility ( CSR) in India adve n ersely. Busin ness houses, trying to restructure t , their resour rces, have run the red line thro ough CSR b budgets. CSR managers claim that s manage ements have issued ins e structions to put on ho all new o old • CSR pro ojects. Budg gets for man ongoing projects ha also ny ave • been cu urtailed. The global financial crisis has helped e s d strengthen the belief that CSR for most Indian business R, houses, was not a very serious issue. , A study by Rajat Pa y anwar and E Eric Hansen, of Forest Business Solution reveals t ns, that most In ndian busin ness houses feel that CSR was only possible if profitability was high. They have s y quoted an Indian m manufacture who said that "no so er ocial activity was possib without a least 25 per cent ble at profitab bility".

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Urba Nightmar by LeoLe an re eonardo

A study by Tatjana Chahoud f the Germ Development y a for man Institute reveals th e hat "India's economic r reforms and its rise d to beco ome an emerging mark and glob player ha not ket bal as resulted in a subst d tantial change in its CS approach SR h...Indian CSR is s still in a con nfused state The stud indicated that e." dy "Indian understand ding of CSR seems to b shifting from the be f traditional philanth hropy towar sustaina rds able development.



Nevertheless, philanthropy continues to be widespread in many Indian companies, "since community development still plays a decisive role in the CSR agenda of most companies". All the PSUs included in the survey indicated that their CSR was philanthropic. Current economic conditions have created an environment in which CSR has become both increasingly challenging and acutely necessary. Social programmes are in need now more than ever since the crisis hit the economically vulnerable sections of the society more severely. Companies need to come up with new and creative ways to win business in a down economy. The present circumstances point to the need for companies to embrace strategic CSR programmes that are tied to their core competencies and that are designed around longterm commitments to deliver social change. Strategic programmes are poised not only to deliver the most effective and efficient social programmes, but also to provide the strongest returns to the business. Ultimately, the more integrated CSR is in the business, the greater chance it has to be able to achieve maximum impact even in the midst of changing economic circumstances. Instead of cutting down on its community activities, Indian businesses need to use this opportunity to strengthen and streamline their CSR agenda. There is a need today for Indian businesses to relook at their CSR interventions and determine their effectiveness. Surveys have clearly indicated several loopholes in the infrastructure and implementation of CSR in most companies.

Construction by Leonard Clagett


With less money to spend, businesses need to put in extra time to think tactically in terms of the big picture. At the end of the day, each company wants to see its investments in the community have a direct complementary impact on its business. There is need to refocus and question what true goals a company's CSR programmes are trying to achieve .


Companies should use this time to measure impact and conduct an analysis of CSR programmes to date, asking,, "Have we really achieved what we said we would achieve?" The Tatjana Chahoud study revealed that "CSR is firmly rooted in the top management". While understanding of the concept at the top management level is strong, little of this trickles down to the implementation level. Few companies have CSR managers who have the required levels of knowledge and awareness about various aspects of CSR. The present crisis offers an opportunity to make CSR more strategic to tackle the new and emerging needs that the present economic downturn is likely to bring. Cutting CSR budget at present will worsen the plight of the vulnerable sections of society. It will send out the message that CSR is a fad to be indulged in only when the going is good. The present is the time when CSR activities need to be increased to help those in need the most to rebuild their lives and trust in business. The financial crisis has hit businesses but has affected most intensely the poor and vulnerable sections of society. While businesses have the government to bail them out with subsidies and concessions, the poor have no such backup. To make matters worse, governments, both state and central, are slashing welfare budgets to finance economic recovery. Governments are throwing money about because they believe that if only people could be persuaded to spend again, then the economy would be all right. Business has a very decisive role to play in helping the vulnerable and poor to tide over the current crisis. Those who continue their CSR commitment are likely to reap substantial benefits. The present is the time when there is need to enhance substantially CSR activities. There is a need to target those most in need and try to rebuild some of the trust in business that has inevitably been lost. The present crisis is the result of the loss of credibility and trust in business. The common feeling all around is that people at the top in business have been greedy and have neglected their responsibility towards society.

Child's Worst Nightmare by SpasticPoison


As the financial crisis plays itself out over time it will show in very uncertain terms that Corporate Social Responsibility is not a fad but the need of the hour. Indian businesses need to shift its attention a little more to their responsibilities towards the society. While the


financia bottom-line is impor al rtant there is also a nee to consid the need of societ and ed der ds ty create g goodwill. There a four area which require urgen attention to improve CSR perfor are as nt e rmance in In ndia. First: M Management needs to p greater attention to the need f training persons t pay o for respons sible for CSR. A 2006-2007 Partners in Chan survey r nge revealed tha the lack of at o knowled and aw dge wareness abo CSR was one of the three important hurd out e dles. It also pointed out the need for in ncreased lev vels of awar reness amon all emplo ng oyees and n need for tra aining for CSR and Human Resource staff. Well -trained and knowledgeable staff will help to ensure R d o greater spread, penetration an effective nd eness of the company's CSR agend e s da. Second Companie need to r d: es raise the lev vels of trans sparency through improved communication. Pr reparing Sustainability and CSR Re eports shou be given serious tho uld n ought. Compan nies also ne to think of tailoring their corp eed k g porate adver rtisements w with increas sed social m messages hi ighlighting their responsible activ vities. Third: E Employees at all levels should hav the know ve wledge and t respons the sibility to contribute to the c company's r responsibilit programm ty mes. A top p-down appr roach does not create a sustainabl CSR prog le gramme. Di isseminating the comp pany's CSR m mission amo ong its employees should start from t very beginning, at the time of recruitmen the f nt. Fourth: Companies should bu : uild effectiv partnersh ve hips with civ society o vil organisation to ns implement their co ommunity d development programm mes. They need to learn from the best of n the volu untary secto Companies can help create soc enterprises which c operate in a or. p cial can e compet titive marke environment and still deliver val et luable socia services to address the al t needs o the vulnerable sectio of socie of ons ety. A successful social enterprise offers a mu uch more su ustainable s solution tha having ch an harities dep pending on a aid.◊ Suresh Kr Pramar is the Edito of CRBiz. or




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