090219_time To Make Csr More Strategic

 

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Time to make e CSR Mo ore Strattegic

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special e emphasis on Ma alaysia and the Asia Pacific Rim. For ou ur editorial

By Sure esh Kr Pram mar

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The currrent global financial crrisis has impacted Corporate Social Responsibili R ty ( CSR) in n India adve ersely. Busin ness houses,, trying to restructure their t resourrces, have run the red line thro ough CSR budgets. b CSR managers s claim that manage ements have e issued ins structions to o put on ho old all new • CSR pro ojects. Budg gets for man ny ongoing projects ha ave also • been cu urtailed. The e global financial crisis s has helped d strengthen the belief that CSR R, for most Indian business houses,, was not a very serious issue.

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A study y by Rajat Pa anwar and Eric E Hansen, of Forest Business Solution ns, reveals that t most In ndian busin ness houses feel that CSR was only possible if profitability was s high. They y have quoted an Indian manufacture m er who said that "no so ocial activity was possib ble without at a least 25 per cent profitab bility".

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©2008 CS SR Digest. All righ hts reserved, exce ept where ind dicated. Copyrightt of Deviant Art visuals remain with the e authors/artists.

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Urba an Nightmar re by LeoLe eonardo

A study y by Tatjana a Chahoud for f the Germ man Development Institute e reveals th hat "India's economic reforms r and d its rise to beco ome an emerging mark ket and glob bal player ha as not resulted d in a substtantial change in its CS SR approach h...Indian CSR is still s in a con nfused state e." The stud dy indicated that "Indian understand ding of CSR seems to be b shifting from f the traditional philanth hropy towarrds sustaina able development.

 

Nevertheless, philanthropy continues to be widespread in many Indian companies, "since community development still plays a decisive role in the CSR agenda of most companies". All the PSUs included in the survey indicated that their CSR was philanthropic. Current economic conditions have created an environment in which CSR has become both increasingly challenging and acutely necessary. Social programmes are in need now more than ever since the crisis hit the economically vulnerable sections of the society more severely. Companies need to come up with new and creative ways to win business in a down economy. The present circumstances point to the need for companies to embrace strategic CSR programmes that are tied to their core competencies and that are designed around longterm commitments to deliver social change. Strategic programmes are poised not only to deliver the most effective and efficient social programmes, but also to provide the strongest returns to the business. Ultimately, the more integrated CSR is in the business, the greater chance it has to be able to achieve maximum impact even in the midst of changing economic circumstances. Instead of cutting down on its community activities, Indian businesses need to use this opportunity to strengthen and streamline their CSR agenda. There is a need today for Indian businesses to relook at their CSR interventions and determine their effectiveness. Surveys have clearly indicated several loopholes in the infrastructure and implementation of CSR in most companies.

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Construction by Leonard Clagett

With less money to spend, businesses need to put in extra time to think tactically in terms of the big picture. At the end of the day, each company wants to see its investments in the community have a direct complementary impact on its business. There is need to refocus and question what true goals a company's CSR programmes are trying to achieve .

 

Companies should use this time to measure impact and conduct an analysis of CSR programmes to date, asking,, "Have we really achieved what we said we would achieve?" The Tatjana Chahoud study revealed that "CSR is firmly rooted in the top management". While understanding of the concept at the top management level is strong, little of this trickles down to the implementation level. Few companies have CSR managers who have the required levels of knowledge and awareness about various aspects of CSR. The present crisis offers an opportunity to make CSR more strategic to tackle the new and emerging needs that the present economic downturn is likely to bring. Cutting CSR budget at present will worsen the plight of the vulnerable sections of society. It will send out the message that CSR is a fad to be indulged in only when the going is good. The present is the time when CSR activities need to be increased to help those in need the most to rebuild their lives and trust in business. The financial crisis has hit businesses but has affected most intensely the poor and vulnerable sections of society. While businesses have the government to bail them out with subsidies and concessions, the poor have no such backup. To make matters worse, governments, both state and central, are slashing welfare budgets to finance economic recovery. Governments are throwing money about because they believe that if only people could be persuaded to spend again, then the economy would be all right. Business has a very decisive role to play in helping the vulnerable and poor to tide over the current crisis. Those who continue their CSR commitment are likely to reap substantial benefits. The present is the time when there is need to enhance substantially CSR activities. There is a need to target those most in need and try to rebuild some of the trust in business that has inevitably been lost. The present crisis is the result of the loss of credibility and trust in business. The common feeling all around is that people at the top in business have been greedy and have neglected their responsibility towards society.

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Child's Worst Nightmare by SpasticPoison

As the financial crisis plays itself out over time it will show in very uncertain terms that Corporate Social Responsibility is not a fad but the need of the hour. Indian businesses need to shift its attention a little more to their responsibilities towards the society. While the

 

financia al bottom-line is imporrtant there is also a nee ed to consid der the need ds of societty and create goodwill. g There are a four area as which require urgen nt attention to improve e CSR perforrmance in In ndia. First: Management M t needs to pay p greater attention to o the need for f training persons respons sible for CSR. A 2006-2007 Partners in Chan nge survey revealed r tha at the lack of o knowled dge and aw wareness abo out CSR was one of the e three important hurd dles. It also pointed out the need for in ncreased lev vels of awarreness amon ng all emplo oyees and n need for tra aining for CSR R and Human Resource staff. Well -trained and d knowledgeable staff will help to o ensure greater spread, penetration an nd effective eness of the e company's s CSR agend da. Second d: Companie es need to raise r the lev vels of trans sparency through improved communication. Prreparing Sustainability and CSR Re eports shou uld be given n serious tho ought. Compan nies also ne eed to think k of tailoring g their corp porate adverrtisements w with increas sed social messages m hiighlighting their responsible activ vities. Third: Employees E at all levels should hav ve the know wledge and the t respons sibility to contribute to the company's c r responsibilit ty programm mes. A top p-down apprroach does not create a sustainablle CSR prog gramme. Diisseminating the comp pany's CSR m mission amo ong its employees should start from the t very beginning, at the time off recruitmen nt. Fourth:: Companies should bu uild effectiv ve partnersh hips with civ vil society o organisation ns to implement their co ommunity developmen d t programm mes. They need to learn n from the best of the volu untary secto or. Companies can help p create soc cial enterprises which c can operate e in a compettitive marke et environment and still deliver valluable socia al services to address the t needs of o the vulnerable sectio ons of socie ety. A successful social enterprise offers a mu uch more su ustainable solution s tha an having ch harities dep pending on aid.◊ a Suresh Kr Pramar is the Edito or of CRBiz.

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