Corporate Social Responsibility

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During and later industrialization period, public sector was given highest priority in India. The public sector was the prime mover of the development and the private sector was asked to take back seat. PSU’s were set up by the state to ensure suitable distribution of resources to the needy though public sector was effective to only certain extent. This led to shift of attention from public to private and their contribution to socio economic development.

1990’s saw India opening up its market to world economy by liberalization privatization and globalization (LPG) . Indian companies started abandoning their traditional engagement with CSR and integrated into sustainable business strategy. Increased growth of economy helped Indian companies grow rapidly and this made them more willing to contribute in the field of social and sustainable development.

Corporate like Tata, Aditya Birla group, Wipro, Infosys and Indian oil corporations have been involved in serving community and maximizing companies impact on society and stake holders have been the basic objectives these days.

Under companies Act of 2013, any company having net worth of rupees 500 crore or more or a net profit of 5 crore or more should be mandatorily spend at least 2% of last 3 year profits on CSR.

Importance of Corporate social responsibility in today’s business world

A strategic approach to corporate social responsibility is increasingly important for competitive advantage. It can bring benefits in terms of Human resource management, innovation capacity, customer relationship, cost savings, and risk management. It encourages social and environmental responsibility by corporate at times where financial crises had damaged consumer confidence.

Organizations with well defined social responsibility program can improve their brand reputation; attract more job candidates and customers. A good public image is a crucial marketing asset and its importance just cannot be underestimated.

In turn, this can lead to increased customer loyalty and sales. One of the findings from the Ipsos study was that 76 per cent of Australians said corporate social responsibility was an important factor when it came to making a purchase decision.

The government of India is spending billions of rupees on the world’s biggest poverty alleviation and employment generation program called Mahatma Gandhi National Rural Employment Guarantee scheme MGNREGS all over India but still government is unable to alleviate poverty and provide employment as expected and the reason being the size of the population and corruption involved in implementation of the program.

Government alone is finding it difficult to get people above poverty level and overall development and the reason is single handed man also do less work. Government needs support of NGO’s and corporate to help itself in its development work. NGO’s and corporate help government in the field of education example Infosys has many schools which provide free education to children’s of all the sections of society irrespective of caste, creed, higher and lower class.

Source: Wikipedia, csrquest.net, tec.com.au