Saturday, February 23, 2013

Corporate Social Responsibility

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“By putting the industry in this area we are generating employment, this is the best CSR we are doing.” One of the Industrialists whose company has the turnover of around 3 million was referring CSR to employment generation. His industry has taken the land on lease with concessional rates, he has the tax holidays, he is using natural resources like water, his industry is polluting land, air and water and his definition of CSR was very limited to employment generation. Now a day, getting employees on contract is challenge, now there are so many opportunities in the market that his organization is facing the employee turnover of 25%.
There are people who even don’t wish to spend small amount on the CSR. However India has witnessed the great industrialist like Tata, Birla who has solid CSR programmes. And they are not doing this just for the compliances.
India has the good background of Gandhian Industrialists. This is moreover Philanthropic nature. Some Indian Industries are contributing very well in CSR.  India is the country that lay heavy emphasis on CSR disclosure norms. However, MNCs also have the strong emphasis on CSR.
Industries which are using the sources which belong to society and not doing anything on CSR may have to change their attitude.  Government is proposing compulsory 2% of Profit spend on CSR under Companies law (with a turnover of more than 1,000 crores)
If we study fundamental principles in CSR, it has three levels.
Level 1: Compliance:
Most of the organizations focus on the complenace level of CSR. Industries does this  just  by compulsion.
Sometimes, law demands, local community demands and companies can’t ignore these demand.
This is done mererly for the compliance of laws and obligations under putting the factory/company is specific areas.  Some companies think that they are using the resources, hence same  should be reciprocated. “We are good company feeling.”
Examples of this level are
So called employment generation, tree plantations around the area, health check ups for local community, community service, education support to local children etc.
Level 2: Philanthropy:
This is a holly reciprocation of industry voluntarily giving back something to the society. There are very few organizations do this. Best example is Tatas and Birlas. These actions are inspired by a sense of earning good name in market, philanthropy, etc.
Examples of this level are:
Support in building education facilities, street light in village, solar equipments, skill development programmes, foundations etc.
Level 3: Innovations, value creation and Key business strategy
This is linked to the business strategy. There is long terms strategy in CSR. Lot of innnovative products are offer to the community.  This is based on win-win basis and is on key business strategy and driver
It is part of core  business strategy. It is broadly adopted by the managing board. It involes brand, sustainability and “we make the difference for future generations”  feeling.      
(Continued…) 

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