Type: Literature review/ Conceptual Paper Authors: Santhosh Basavaraj Research Scholar in Management, Anna University of Technology, Coimbatore. Dr. B.Rajasekaran, Principal Cum Director, RKKR School of Management Studies, Salem. Purpose of the research The purpose of this research paper is to identify and gain an insight in to the set of challenges faced by Public sector and Private sector companies in implementing and good Corporate Social Responsibility practices and exploring the conceptual solution to face the challenges. Design/methodology/approach This is an exploratory research design and it is used to seek insight in to challenges faced in implementing Corporate Social Responsibility (CSR).here an attempt is made to explore the conceptual strategies to meet these challenges. Definition of Corporate Social Responsibility (CSR). CSR remains a very relevant strategic Marketing tool. Adam Lindgreen, et al (2009), observed that CSR practices are more prevalent in organizations that employ relational marketing practices. European Commission (2001) defines CSR as a concept whereby companies decide voluntarily to contribute to a better society and cleaner environment and as a process by which companies manage their relationship with stakeholders. Business cannot escape from society and society cannot exist without business (Davis and Frederick, 1985). Thus, there is a two way relationship between business and society, Cannon (1994) holds the view that business is expected to create wealth, supply market, generate employment, innovate and produce a sufficient surplus to sustain its activities and improve its competitiveness while contributing to the maintenance of community in which it operates. Consumers consider switching to another company's products and services, speak out against the company to family/friends, refuse to invest in that company's stock, refuse to work at the company and boycott the company's products and services in case of negative corporate citizenship behaviours (Edenkamp, 2002).In today's competitative environment CSR practically has the same effects as advertisements, because it sheds a positive light on a brand or product. People want to be engaged with companies that share their values (Scott Beaudoin, 2009).CSR has shifted decisively from the realm of `nice to do' to the realm of `need to do' not just because it is a serious and sustained interest of consumers but also because opinion leaders recognize the fact and will act accordingly.
A number of studies conducted in past arrived at positive association between CSR and financial performance (Ruf et al, 2001).Companies going for CSR find it comparatively easy to recruit and retain the skilled employees for a sufficient long period of time which are vital for the success of business (Krishna, 1992).Effective partnerships between corporates,NGOs and the government will place Indias social development on a faster track ( Ramya Sathish,2010).In fact companies can successfully make a business case for improving profitability through higher market share and increased customer loyalty if they can demonstrate their CSR practices as unique differentiator (Balasubramanian,2007). Companies consider themselves as an integral part of the society and act in a socially responsible way (European Commission, 2001) Though the earlier decades are referred to as false dawns wherein CSR had a regional, person centered philanthropic focus, it is now viewed to be inclusive, broad and diverse (Silberhorn and Warren, 2007).They view these activities not as a cost but an investment, as a long term strategy minimizing risks linked to uncertainty. (European Commission, 2001). Literature Review This research is an effort to identify various challenges faced in the area of Corporate Social Responsibility and explores the various strategies to optimally meet these challenges. These strategies are originally conceptualized by these researchers with a strong literature review as the bases of study. CSR is not a new concept for Indian corporate as it is started from the last century in the beginning of Industrialization process in India. From last fifteen year CSR has gained the momentum in India. Today CSR has become one of the integral part of marketing strategy to build the Brand Image for the product in market.Corporates also going beyond their limitations to serve social responsibility imposed to them by the society. Under these circumstances corporate scandals unveils the other face of corporate and questions authentication of their responsibility. Today changing environment made corporate to think seriously about their investments on CSR activities and they can not merely consider it has an optional activity. Even a small activity like child labor in local factory will affect the business reputation across the globe and it will spread swiftly with the help of mass media. It is very clear that investment made now by companies on CSR leadership will be handsomely repaid by brand sales in the future. It is the need of the hour for companies to behave with consistent social responsibility and even when incurring additional cost and gaining no commercial advantage from doing so. Eventually company which earns good reputation through CSR and creates the image of honesty in its dealing will earn the distinguished competitive advantage for tomorrow. Consumers expect firms to conduct business ethically, and they also showed their willingness to reward ethical behavior and punish the unethical behavior of firms through their purchase behavior. Customers prefer to purchase from the companies which are conscious about CSR. Corporate social responsibility ensures that corporations promote corporate citizenship as part of their culture by demonstrating a commitment to improving the quality of life in the communities in which they operate. CSR contributes positively to firms market value.
CSR is not an occasional act of charity or contribution to a school, hospital or an environmental NGO, but an ongoing commitment that is integrated into the core business objectives and strategy. Organizations are increasingly realizing that CSR is no longer a collection of discreet practices or occasional gestures motivated by marketing or public relations. It is rather a comprehensive set of practices and policies that should be integrated into the organizations operations and activities. (Kirti Dutta, M. Durgamohan) In this research paper Corporate Social Responsibilities challenges have been identified and classified as intrinsic challenges and extrinsic challenges. Intrinsic challenges are posed by the internal environment. On the other hand this research has classified extrinsic problems which are related to external environment An extensive secondary literature survey has been adopted by researchers to identify these challenges. Both public sector and private sector face these Corporate Social Responsibilities challenges and here an attempt is made to explore the conceptual strategies (solutions) to meet these challenges. Corporate Social Responsibilities challenges and conceptual strategies are classified as follows:
Intrinsic Challenges
Management related challenges. Safety, welfare & Social Initiatives related challenges. Employee/Workplace related challenges. Employee/Workplace Regulatory related challenges. Other Challenges
Extrinsic Challenges
Environmental related challenges. Prospective Challenges. Community/Social Development related challenges. External Agencies related challenges. Awareness/Market related challenges.
Intrinsic Challenges
c. Enhancing employee attitude survey ratings. d. Lack of Transparency of implementing agencies Process of trust building. e. Shared ownership of CSR.
5. Other challenges
a. Consistency in the management of people & processes across the business. b. Lack of definitive direction to CSR initiatives of companies. c. Lack of Consensus on Implementing CSR Issues. d. Lack of consensus amongst local Agencies. e. Lack of infrastructure (IT, space, people, etc.)
Conceptual strategies to overcome challenges 1. Thorough analysis of decision which impact environment.
a. Thorough check on release of hazardous gases. b. Using more renewable source of energy eg: Solar energy, wind energy etc. c. Forestation, Waste management and soil erosion projects.
2. Prospective Challenges.
a. Emerging trends and future challenges. b. Global Issues and Challenges. c. E-initiatives Online Information, 5
education, etc
b. During economy slowdown working on core competencies. c. Educating rural population in computer literacy
profits.
a. Accountability and periodic result analysis b. Emphasis on Quality Management systems accreditation for suppliers. c. Trust building and profit sharing (Nominal). d. Fine tuning the contracts as per latest requirements and mutual trust and mutual benefit should be core for this relationship. e. Aligning the quality standards with day to day activities. f. Continuous training and awareness program to NGOs on CSR objectives. g. Encouraging unemployed village youths to start 6
NGO which create employment opportunities also in rural India. 5. Careful articulation of CSR message to
Executions of CSR initiatives in a rural developing economy are complied. Medical camps for sterilization programs to control population are being conducted. Self employment training programs to overcome poverty and medical camps conducted in villages for regular health checkup and providing infrastructure for education. Self employment training programs is organized to enhance skill level. Better Communication channels are established to address the hesitation/non participation by the village folk Women's empowerment is being carried out with sustainable measures. Good relationship has been established with Local agencies and NGOs and constant interaction with local village panchayats is being conducted and involved suppliers in quality requirements. Lack of Community Participation in CSR activities is tackled by continuous interactions and ascertaining their needs from time to time. Need to Build Local Capacities is being done in areas of specialized needs to make visible their efforts for this purpose local and national press and e-media has been used. VOLVO BUSES INDIA PVT. LTD From Private sector VOLVO BUSES INDIA PVT. LTD., Bangalore has been identified and a senior executive has been interviewed with the help of questionnaire. VOLVO adopted following strategies to address its internal CSR challenges In VOLVO Management focus more on monitoring mechanism with the proper system of planning, targets, Budget allocation and proper budget utilization for CSR activities which is supported by good CSR policy and corporate accountability. Well defined document procedure and guideline with well defined responsibility structures are established to address all these issues in VOLVO. VOLVO does not support the most of the conceptual strategies framed by researchers but rather it focus on safety and says Safety being a 'Core Value' of Volvo we have a well built mechanism in place in all our activities right from the top management to the bottom line to address these concerns with respect to safety. Again CSR of VOLVO does not support employee/Workplace related challenges and realizes it has strong belief in its core values, which directly reflect in their day to day management of operations and all these issues with respect to employee / work place related challenges are addressed in policy guidelines. Volvo complies with all legal requirements vis--vis local, state, national and international. A well established and fool proof system is in place. Volvo reiterate that it has not experienced such challenges with respect to environment, social related and agency related activities and assures that it care for the environment which is being a 'Core Value' of Volvo and well built mechanism in place in activities right from the top management to the bottom line to address these concerns with respect to environmental care, be it local issues or otherwise. For Community/Social Development related challenges a well thought over and defined process is followed by management and it is being handled accordingly as per the management guidelines for the same.
With respect to Agency related challenges Volvo says it has no issues, as all actions are as per clearly established and laid out policies and guidelines be it selection of agencies or contractual relationships. Practical implications The findings of this research paper will enable the managers to consider the various options available to face the Challenges of Corporate Social Responsibility. The output of this research paper is useful for academic purpose also. Originality/value Changing scenario has brought many changes in the operation of both public and private organizations and today organizations are realizing the importance of Corporate social responsibility activity. This paper is first of its kind where it has explored various challenges of CSR and potential solutions for such challenges. Findings These researchers gained an insight of various challenges faced by ne Public Sector organisation and One Private Sector organization in India and tests the various challenges faced by them in external and internal environment. Conceptual strategies are hypothesized and empirical tests are conducted to ascertain the practical implementation of conceptual strategies. It was found that Public sectors employ more measure and meets most of the challenges than private sector. Recommendations: All the challenges conceptualized by this researcher are appropriate for Public sector and Private sector organization and most of the strategies are practically implemented in selected sample organization. It is recommended that organizations must give a thought on this challenges and respective proposed strategies before implementing CSR activities. An effective implementation of CSR activity is only possible when an organization considers all the given challenges before hand. It can not neglect either external or internal both demands equal amount of dedication. Clear Guidelines/Policy is the core for effective implementation of CSR activity and this is proved by empirical test in the case of private and public sector. So, it is recommended for organizations to have clear policy/guidelines for its CSR activities. Some time it becomes very difficult for organizations to spend the allotted amount for CSR activity even though organizations ensures proper planning it fails to anticipate the challenges and this research paper provide good inputs for such problems. During this research some bad trends has been observed by this researchers in the case of public sector companies one out of that is owning the NGOs by politicians to take the money allotted for CSR. This research paper provides a holistic approach for various challenges for CSR. 9
Conclusion:
During empirical work Public sector organization shown positive signs for this researchers hypothesis than in Private sector. This research reiterated the importance of partnering of NGOs and their role in implementing CSR activities.
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