FOREIGN EXCHANGE RESERVE AND ITS IMPORTANCE DURING COVID: HARSH CHANDAN
Introduction
Corporate Social Responsibility (CSR) is
the accountability of companies towards the society. The companies ought to
make decisions which are advantageous to the society at large and the main
motive of CSR is to keeping the interest of the society in line with the goals
of an organisation. A company while running its business needs to adhere to the
laws and hand in hand also the ethics and morals, which in turn makes them
responsible socially. The question that arises is, how do companies follow
social responsibility? So, most of the companies formulate guidelines as to how
they shall contribute towards the society. While, the most common way of doing
so is taking out a portion of profits made by these companies and contributing
them towards the welfare of the society the other way might be where they have
set up a team who shall particularly look into development and catering to the
needs of the society for its welfare. In this scenario, a particular sum is
taken out every time to cater to the needs of the society. What stands very
important for every CSR initiative is that the top level executives lend in
support for it and make sure the benefit is actually done. For this, as stated
earlier a role/post might be made as in the cases of big companies who shall
look after these CSR initiative. While, this can be done for companies making
huge profits and can keep public trust by their side by contributing towards
the society, the non-profit organisation rely on public trust and unlike other
firms do not have huge funds so as to contribute heavily. These firms depend on
donation and hence, public trust is very much needed. They achieve the goal of
public trust by showing transparency and accountability, this also in-turn
helps them with the donations coming in.
Benefits
of CSR to Organisations
Time and again it has been told and
brought to notice that companies and organisations dwell into CSR initiatives
only to gain their marketing purposes. Hence, it is essential to understand
what benefits such organisations have while performing CSR activities.
Primarily, every organisation is built on
their public trust and brand recognition.
The same can be earned by contributing towards the society as a whole. While a
meagre 5% profits to CSR initiative might not look huge but in the long run
these contributions with time do yield fruits and results. In the Indian
context, organisations such as WIPRO, ONGC and Reliance have huge public trust
which although has been gained due to their working but also due to the
responsibility adopted towards the society at large.[1]
According to a study, 55% consumers are
willing to pay more for products from socially responsible companies.[2]
Let’s take the example of P&G, in India P&G pledged to donate Re.1 for
every product that is bought towards Shiksha, an NGO. Thereby, helping them in
their sales motive as well. Hence, this brings us to the second point that is increased demand and sales.
Third, it is often seen that major chunk
of companies get into CSR initiatives so as to avoid government intervention and regular check – ups. Even the
government promotes companies to take up such initiatives. Regularly
contributing towards society makes public trust on the side of company and
involves less checks and audits done by government in such organisations. The
other important aspect shall be the employee’s satisfaction. When the employees
are well aware of the fact that what they produce or make shall indeed, further
help in making a difference in the society in the longer run it helps in their
satisfaction.
Corporate citizenship is related to the
contributions an organisation makes to the community/society as a whole. And
the concept of corporate citizenship and CSR enables the organisation to
benefit in the above mentioned aspect. A good corporate citizenship builds positive
brand identity and which in turn helps the brand in the longer run. Contributing
to the society and community in the longer run leads to positive corporate
citizenship.
When would CSR not work?
Social Responsibility cannot be taken up
with the sole motive of brand reputation or marketing advantage of product and
hence, the initiative of CSR will not work or tend to show results when it is
opted due to the following reasons:
If an organisation dwells into investing
funds in places which is primarily not related to the area of practice or focus
which they deal in they should analyse how much difference would it cause.
Because then it actually just goes on to show that the initiative taken up is
to build brand reputation. Investing in an organisation/place related to the
area of focus of organisation helps to also show that they believe in that project
in the society/community and that they are not deviating.
The other reason is such initiatives
cannot be used solely for marketing purpose. The fruits of CSR can be seen in
the long run and can yield fruits in the long run but taking up such
initiatives to promote their products and sales can hamper their brand image
and it taken no time for the public to realise the same.
Other benefit was less government intervention
and that can be achieved in the long run only if the organisation is dedicated
to CSR in the long run. One time measure shall not ensure such benefits and
hence, the companies need to stay in such initiatives for a long run.
To conclude, adopting CSR initiatives make
a big impact on the society but such measures should not be adopted solely with
the purpose of benefit of the company at the end but the benefit of the society
at large. Only then can the benefits actually be seen when the company is
associated in such activities in longer run.
[1] What
is Corporate Social Responsibility by Business News Daily (26th June
2020)
https://www.businessnewsdaily.com/4679-corporate-social-responsibility.html
[2] Why CSR: Four Benefits
of Corporate Social Responsibility by Fronetics –Marketing the supply chain
https://www.fronetics.com/csr-four-benefits-corporate-social-responsibility/
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