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Corporate social responsibility as business strategy

There is a visible attention being paid towards social and environmental consequences of business and yet performance in this front is far from satisfactory. Common trait seen across companies is that social concern and business are seen as two independent responsibilities and often at loggerhead. As a consequence, companies lose focus of how social responsibility could have been integrated with the long term business outcomes. Businesses across the world are so obsessed with the immediacy of results that they cannot sight the vast opportunity that discharging of social responsibility holds for the long term sustainability of the organizations. As a result, based on the maturity of strategic thinking in the company, CSR is being implemented in one or more of the following ways as shown here:


CSR as Reactive strategy

CSR has in general been a reactive strategy for reviving drooping fortunes of the company by gaining the confidence of the communities in which they operate. The case of Shell in Nigeria and that of Nike in Asian countries are just two examples to quote. With such instances on the rise companies have started adopting a “proactive approach” analyzing the cost of not discharging the social responsibility and as a result do the bare minimum to pull on and thus minimizing their spending on this account. CSR is viewed by these companies as a cost and compulsion. This approach only obscures a business from identifying the real potential CSR holds with respect to their core business. Any complacence by such companies may result in the kind of corporate scandals that we are comming across today. Corporate misdeeds are indeed costly, if caught.

CSR as Image building exercise

Efforts of companies to recover from the effects of not discharging social responsibility can broadly be classified as damage control exercise as far as their image is concerned. Here the businesses have their back against the wall. However, CSR today is seen by companies as an opportunity for building corporate image. Keen on drawing attention of media and general public, companies announce their plans for various kinds of philatropic activities. There is nothing wrong with this kind of approach, except for the fact that such initiatives are not emphasized in the maze of important and urgent business calls. If a company can develop a systematic and delibrate approach for maintaining the focus on social welfare activities, this will not only enhance its image in the immediate future but consistency on this front will help the company in building a positive reputaion of societal concern. Such image will definitely help the company in its future business forays in the region.

On the other hand, the image building campaign includes CSR reporting where a series of disjointed anecdotes of companies’ contribution to society are highlighted, which are in no way related to implementation of the business strategy of the company. This underlines the fact that potential of CSR as a tool for image building is more easily comprehended by corporate offices rather than as a means of creating a sustainable business.

CSR for improved operating efficiency

There are other set of companies that take care of environment because not only does it help in operating with in the environmental norms set by statutory authorities but also reducing their costs by improving operating efficiency. Operating barely with in the norms set by statutory authorities is being in the compliance mode. As companies deliberately plan and move beyond the compliance mode, find the case for integration of CSR and business goals, where improved productivity or operational efficiency in current time frame also results in better environmental conditions that fosters better living conditions for future generations. This in fact is a business necessity today for improved profitability for industry and cleverly used by companies for projecting a business case for CSR and showcasing the integration of CSR and business outcomes.

CSR as Source of competitive advantage

Business must have clear understanding of the communities that they impact and must give a serious thought to the question – How the strategy helps these communities grow qualitatively along with the business in the short and long term? The answer to this question may not be obviously forthcoming but an open debate among the executives and strategic managers may open up options, that may help improve the quality of life indicators for the communities around in a way that enhances business opportunity for tomorrow if not the current profitability.

The challenge for industry today is to identify social issues that drive its competitiveness both now and in the future. For this to happen managers must first believe that social concern or CSR as it is popularly known is a source of business opportunity and competitive advantage. This integration then would pave way for all round sustainability and growth.

Sooner than most of the experts suspect, the issues relating to climate change and social responsibility in the area of operations will be decisive factors for survival of businesses. CSR has the potential to change the way business is conducted the world over.

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