CSR…what a great topic. Very hot to handle. Shareholders, markets, people, businesses going crazy over this word. Every business wants to prove that they have very good CSR, some have formed dedicated departments for this. Businesses are made to believe that CSR is a way to give back to society. Is it really what companies should do? Many Pandits are of opinion that it is most important thing in today’s world. I beg to differ. I am not objecting the idea of CSR, I don’t like the way it is done.
Some examples. XYZ company starts program for poor children in villages, Another company gives donation to school, ABC company gives donation to hospital in rural area.
We feel great when we hear such stories. People think these companies are really doing wonderful job. I beg to differ. I don’t believe in such donations and gifts. Companies claim tax benefits for these CSR so they are not actually donating they are just giving money to Non profit organization instead of Government. So can you label it as “donation” or you should label it as “Account Transfer”. Companies using resources earned from their core operation to help poor and needy and at the same time laying off many people, cutting salaries on the excuse of cost pressure is a harsh reality of today’s world.
I believe that companies are not formed for doing charity and they should not try to do.(Humble Request: Don’t form an opinion unless you read completely). Let people contribute as per their wish. I don’t think giving grant and donation is actually helping society. Because company is giving it from the profit it earned from society itself and just paying back less than 1%. Today’s corporations and businesses just add these costs to overheads and recover from products and services they offer. So actually customers are paying for that.
According to me the responsible company is the company which do not only look at profit but develop products and services that help solve problem people face. companies role should be create products that help growth, create products that needy can use and grow. Utilize resources it has earned to develop new concepts, new business models which can be implemented for growth. Only Growth can solve the problems and not the donations.
I may be wrong about this, may be my understanding is not that clear about role of companies in current society. But to me I will like big software company to create a center that will give small businesses easy access to software that they can use to grow rather than feeding poor in village. I will like big cement maker to build training center where people can learn construction at affordable cost rather than running hospital, Big power company can invest in renewable energy which can solve the power crisis and give people chance to grow rather than donating. Such acts will not only create growth but also create resource pool which can be tapped by needy and underprivileged. Current success in microfinance is a role model for this. These companies are earning profit but creating resources which can be tapped by needy.
I don’t deny school, hospital are not important but there are 1000 such things which are not correct and need to be fixed. Water, malnutrition, aids, TB, unemployment, illiteracy, and so on. So which problems company will tackle, how will it decide which problem to be solved and which problem is bigger than other. After thinking about it I can say company should concentrate on field it wants to excel in, create wonderful products and services that will be not only affordable but will help growth.
My belief is companies who are interested in CSR should create environment where needy people can grow, but companies should not give everything on the platter.
References: Some of thoughts above may be influenced by readings from Peter F Drucker’s work and other related readings. I have not used any specific material to get the facts but in case anyone has already presented these ideas I wish to credit the person for the same.
Note: Please note the content above is my own understanding and opinion, I respect the counter views and opinions. Also please note that the content is not intended to be directing to any particular company, country, region.
Signing Off
Nikhil Parchure
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I enjoyed reading your post. Some companies' identities are so closely tied to their involvement in the community. For example, if Nike donates sports equipment and uniforms to a university, how much is the public good will they generated worth? Then they get free exposure of their logo when the athletes are interviewed on TV.
ReplyDeleteI really liked your thoughts in this article. Thanks for writing and sharing! :)
ReplyDeleteHi Nikhil - I've really enjoyed your blog posts as well, and will be looking forward to more!
ReplyDeleteI hope you don't mind if I shared a quick personal thought of my own about CSR. I agree that a business playing the role of benevolent philanthroper doesn't make much sense, but I also think CSR is much more than donating to poor villages.
In my opinion, a business that measures its impact socially, environmentally, and financially has a particular set of knowledge that will help them thrive. A CSR report allows a company to track its energy use, its employee turnover rate, its identity in its operating community. Knowing this will allow management to see problems brewing before they pop. Ultimately, corporate social responsibility is just a means to recognize problems before they occur, and a tool to realize external environment factors that could threaten the business.