Corporate Social Responsibility-CSR : A Public Relations Tool for Image Building

Corporate Social Responsibility-CSR

A Public Relations Tool for Image Building

Corporate social responsibility-CSR refers to the strategies corporations or firms design to conduct their business in a way that is ethical, society friendly and beneficial to community in terms of development. The classical view of CSR was narrowly limited to philanthropy and then shifted to the emphasis on business-society relations particularly referring to the contribution that a corporation or firm provided for solving social problems.

CSR, also called corporate responsibility, corporate citizenship, responsible business and corporate social opportunity, is a concept whereby business organizations consider the interest of society by taking responsibility for the impact of their activities on its various publics i.e. shareholders, employees, customers, suppliers, communities, govt. and other stakeholders as well as their environment.

CSR involves a range of activities such as working in partnership with local communities, NGOs, socially sensitive investment, developing relationships with customers, employees and their families, and involving in activities for environmental conservation and sustainability, community welfare and development.

Thanks to ‘The Companies Act 2013’ which redefine CSR as activities that promote poverty reduction, education, health, environmental sustainability, gender equality, and vocational skills development. Companies can choose which area to invest in, or contribute the amount to central or state government funds earmarked for socio-economic development.

As per The Companies Act 2013, CSR will apply to any company that is incorporated in India, whether it is domestic or a subsidiary of a foreign company, and which has a. net worth of Rs. 5 billion or more, b. turnover of Rs. 10 billion or more, or c. net profit of Rs. 50 million or more during any of the previous three financial years. Such companies should spend at least 2 percent of their profits every year on CSR.

Corporate Social Responsibility must be seen by the companies as a responsibility not imposed by outside forces but guided by conscience and the best practices of giving back to society, people, communities, and environment what they took from them. Companies have now begun to realize the criticality of CSR as value addition that might offer them competitive advantage in business.

The potential of using CSR for a positive image and brand building is being judiciously capitalized by the companies today. Investing in CSR may not directly lead to an increase in the bottom-line, but nevertheless it can surely aid in forming a positive perception about the company among the masses. For image building, there are multiple ways at company’s disposal, but choosing the most appropriate path that is in synergy with business goals and corporate image building, becomes a subject of strategic decision.

One common approach of using CSR in corporate image building exercise is to follow inside out influence on society. This strategy focuses on creating a positive image from the primary or the core activities which the company carries out. For example, fair procurement price, safe products, truthful marketing, respectable labour practices come under this category. A committed effort is also placed on saving the environment from adverse effects of company operations. Even the end products are publicized in a way to highlight their role in safeguarding the environment.

Another approach of utilizing CSR as an instrument for image building is to adopt some social or environmental cause. Some companies have used CSR in a holistic way such that it has not only built an image, but also improved its business and benefitted society. AMUL and NESTLE  took initiatives to improve the condition of local dairy farmers, which in turn secured the supply of milk and improved the perception of company as being socially responsible.

Enhancing reputation through CSR activities can help in brand building and attracting more business. A positive perception about the company can help in securing the deals with new partners, investors and regulatory authorities. Additionally, it also helps in rapport building with the customers and the employees. A considerable number of customers prefer to avail services from those companies who demonstrate responsible business. Furthermore, the advantage of attracting and retaining talent also depends on the candidate’s perception of company brand, which is partially determined by the social and ethical practices of the company.

CSR, if used strategically, can be utilized for a positive image building and business development. Company needs to meticulously plan out their strategy in such a way that the image building exercise does not compromise the core social and environmental responsibility, which is the crux of CSR.

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