A Business Case for CSR

The prospect of stakeholders (consumers, employees, investors, communities, and governments) with regard to the commitment of their companies to socially responsible business practices has increased considerably with time. As a result, corporate social responsibility (CSR) is becoming a increasingly more important component of good business practice and an added dimension of management.

A Business Case for CSR
The benefits of implementing CSR strategies are largely difficult to quantify. Therefore, it is not surprising that a large number of arguments encouraging businesses to be socially responsible are based on 'beyond-financial-benefits' perspectives. It has been our experience too, that while developing their CSR strategy corporations are not aiming at short-run financial returns.
This is not to suggest that CSR has no business case and is limited to 'feel-good', voluntary and charitable efforts. In many companies CSR functions are based within the human resources or public relations departments and in some case, in a separate unit. However, in the best of CSR efforts the concept is so well integrated into the key business activities of the company that the CSR values are operationalised through direct everyday work of the employees.
Companies that commit to developing a comprehensive CSR strategy can expect benefits from a number of possible positive outcomes, including:

• Enhanced brand value and corporate image
  
• improved customer loyalty
  
• Reduction of risk as a result of clearer grasp of positions taken by stakeholders
  
• Gaining an informal social license, facilitating business in sensitive environments
  
• Development of a better work culture within the organisation and increased employee satisfaction.

Corporate social responsibility has much broader implications for the nation as a whole. It reduces dependency on the government for social change. Most governmental programmes quickly become embroiled in political manipulation, corruption, communal overtones, and bitter infighting. There is a need for public-private partnership with well-defined controls and processes for the best use of resources for social change. Social reforms driven by the community will bring people together, turn the attention of the masses to tasks that benefit society, and reinforce peace and harmony.

In recent times, a number of foundations set up by leading Indian firms, including Infosys, Wipro, Tatas, TVS, and Dr. Reddy's Laboratory, have taken a keen interest in corporate activism to improve healthcare, education, and living conditions, and reduce poverty. These foundations support numerous government primary schools and have developed processes and methodologies for effective change. They support hundreds of non-governmental organisations and have built orphanages, hospitals, and schools.

Creating Social and Economic Value through Value Based Business

• Calculating benefits and costs to make the business case;
  
• Identifying and managing positive as well as negative impacts;
  
• Integrating CSR best practices into key business areas;
  
• Recognising outstanding efforts towards this end.

However, the challenges in India are enormous. Social responsibility should not be limited to large successful corporations; there should be greater participation from most small, medium, and large businesses. The goodwill firms can generate from acts of social responsibility may, in fact, be worth far more to the businesses than the amounts they give. Corporations collectively can make India a better place for every citizen.

Corporate social responsibility is about tradition and culture. Firms can institutionalise voluntarism among employees through appropriate incentives and recognition. Internal performance evaluation of employees could recognise community work. Community work can take many forms: teaching in government schools, supporting NGOs financially, empowering women, cleaning parks, planting trees, volunteering in orphanages, protecting the abused. Many corporations in the U.S. allow employees to write about their community service as part of their annual evaluation report. Even if companies do not reward community activities, at least, the idea that the company cares will have a positive impact.

Corporations and Civil Society as Good Neighbours

• Recognising the links between the welfare of society and that of the company;
  
• Proactively examining opportunities designed to benefit the organization and the community in terms of the environment, diversity, human rights, social impact, and the economy;
  
• Facilitating relationship building between NGOs and Corporations as co-actors of development