CSR Campaign of Corporate Sectors: A Study on Rural India


By

Nihar Mohapatra
Lecturer
Global Institute of Management
Bhubaneswar

Tapas Ranjan Moharana
Sr. Lecturer
Global Institute of Management
Bhubaneswar

Arjuna Charan Behera
JRF(ICPR)
Utkal University
Bhubaneswar
 


ABSTRACT

An innovative model is being implemented by corporate world to build brands in the rural market. Organisations are instigating social responsibility campaigns in the rural areas, which also exhibit the potencies and the values that a brand illustrates.  These campaigns create valuable words of mouth publicity for the brand in the oral socialist culture of rural India, which the short ten second commercial advertisements are not in a position to do. Corporate world needs to build a social responsibility campaign around the business model of the organisation and strengths and values that are depicted by the brand. Then only the campaign can be useful to build brand in the rural areas.

Key Words:- CSR, brand Building, Rural India,

INTRODUCTION

The concept of corporate social responsibility originated in the 1950s in USA and the concept came into prominence in public debate during the 1960s and 1970s. During 1980s to 2000, corporations generally recognized a responsibility to society and weighed against the demands of being competitive in a rapidly changing global economy. Corporate social responsibility is fundamentally a philosophy or a vision about the relationship of business and society. It is a process of continuous improvement which begins small, grows and expands over a period of time. It has been referred to as caring capitalism in contrast to financial capitalism. Corporate Social Responsibility (CSR), also known as corporate responsibility, corporate citizenship, responsible business and corporate social performance is a form of corporate self-regulation integrated into a business model. Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure their adherence to law, ethical standards, and international norms. Business would embrace responsibility for the impact of their activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, business would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. CSR is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: People, Planet, and Profit.

Corporate Social Responsibility (CSR) is a concept that encourages organizations to consider the interests of society by taking responsibility for the impact of the organization's activities on customers, employees, shareholders, communities and the environment in all aspects of its operations. This obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large.The practice of CSR is subject to much debate and criticism. Proponents argue that there is a strong business case for CSR, in that corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate, short-term profits. Critics argue that CSR distracts from the fundamental economic role of businesses; others argue that it is nothing more than superficial window-dressing; others argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations.

Social responsibility is an ethical or ideological theory that an entity whether it is a government, corporation, organization or individual has a responsibility to society. This responsibility can be "negative", meaning there is a responsibility to refrain from acting (resistance stance) or it can be "positive," meaning there is a responsibility to act (proactive stance).There is a large inequality in the means and roles of different entities to fulfill their claimed responsibility. This would imply the different entities have different responsibilities, in so much as states should ensure the civil rights of their citizens, that corporations should respect and encourage the human rights of their employees and that citizens should abide with written laws. But social responsibility can mean more than these examples. Many Non-governmental organizations (NGOs) accept that their role and the responsibility of their members as citizens are to help improve society by taking a proactive stance in their societal roles. It can also imply that corporations have an implicit obligation to give back to society.

Many businesses in emerging markets are realizing benefits from corporate social responsibility initiatives, with quantified improvements in revenue and market access, productivity, and risk-management. While emerging-market companies tend to focus more on short-term cost savings and revenue gains, intangibles, such as brand value and reputation issues, are more significant for companies in developed countries. The contemporary corporate social responsibility agenda, however, is relatively immature in all countries. Despite widespread rhetoric, its impact is still patchy. In practice, implementation of this agenda by many companies is shallow and fragmented. Governments are beginning to view corporate social responsibility as cost-effective means to enhance sustainable development strategies, and as a component of their national competitiveness strategies to attract foreign direct investment and position their exports in global markets. There is a significant opportunity for the public sector to harness business enthusiasm for corporate social responsibility to help achieve its goal of reducing poverty. The challenge today for the public sector in developing countries is to identify corporate social responsibility priorities and incentives that are meaningful in their national context, and to play a role in strengthening appropriate local initiatives.

Corporate social responsibility is not a new concept in India. However, what is new is the shift in focus from making profits to meeting societal challenges. Now-a-days, employees are actively participating in the social activities even on holidays. This is mainly because employees feel a sense of pride when they are involved in such activities. Moreover, companies are having dedicated departments for CSR. CSR taken up by various range of companies primarily focuses on poverty alleviation, environmental protection and sustained development. Companies are taking initiatives for developing infrastructure in rural areas. TVS Electronics was involved in CSR during the Tsunami to provide relief measures to the victims. They have also participated with the government to improve sanitation in a village called Tiruvidenthai. Such initiatives will help in improving the conditions of rural people. Satyam Foundation of Satyam Computer Services Ltd., Infosys Foundation of Infosys Technologies Ltd., GE Foundation of the General Electric Company are exemplary instances of the benevolent commitment of the corporate sector in India. Irrespective of the profits they make, these foundations are aiming at uplifting of the poor and enhancing the standard of life in the rural sector.

The companies which implemented CSR in rural India are discussed below

RURAL ELECTRIFICATION CORPORATION LTD

The approach of REC towards Corporate Social Responsibility is oriented to identify and formulate projects in response to felt societal needs in diverse areas and to implement them with full involvement and commitment in a time bound manner. As a responsible corporate entity, Rural Electrification Corporation is consistently strive for opportunities to meet the expectation of its stake holders by pursuing the concept of sustainable development. The major activities in rural area are to facilitate demonstration of commercially viable rural electricity delivery models with appropriate intervention and support on a selective basis such that they can be replicated elsewhere. REC provides promotion of rural enterprise and livelihood including skill development and training, Provides development support to common facility centres / production centres in rural areas. REC Promotes development of rural technologies for micro enterprise and also Promotes sports and games.

LAFARGE CEMENT

Lafarge worldwide gives prime importance to sustainable development for sustainable economic performance. Lafarge is committed to the communities where it operates. In India Lafarge has undertaken a number of initiatives under its corporate social responsibility programme. The major initiatives are Project Employability, Project Low Cost Housing, and Project Education. Project Employability focuses on creating sustainable livelihoods for local communities. The concept of the project is to build communities that are more skilled and capable of sustaining themselves independently by capitalizing on the company's expertise, knowledge and competencies, rather than merely providing continued financial support. It directly provides solutions to the critical community problem of unemployment, through a method, which is "development" oriented and lays the foundation for long term success of the society.
Project Employability provides professional training in masonry to the illiterate and unemployed youth in these communities making them employable. The objective of Low Cost Housing is to promote and enhance the use of cement in houses in order to provide safe and comfortable habitats. Since a large part of India (70%) lives in rural areas, the project is largely geared to meet rural housing needs. Project Low Cost housing, which we initiated during 2004 incorporating modern technology, has become our priority area. The goal of the project is to design safe houses, which are replete with basic amenities and provide a platform for its replication across geographies. Lafarge at present is conducting Computer Education classes, free of cost, for over 1500 girl children in about 10 middle schools in Jharkhand and Chhattisgarh in the part of its Project Education.  Lafarge also has plans to broaden the scope and escalate the activities of Project Education further under the aegis of

BPCL

BPCL initially started working in Mahul, the village located in the vicinity of its Mumbai refinery since 1986. The habitants of Mahul, essentially from the fishing community, were rich because they possessed marine wealth but as far as education, health, etc was concerned, they needed help. BPCL volunteered and the initial success brought such gratification that immediately it adopted another village (this time an interior one) called Karjat, developments with selfless intentions helped introspect about the future role BPCL should adopt in its aim to contribute to this effort, then there after there was no looking back. As a corporate responsibility, today 37 villages across India have been adopted. This includes making substantial investments for nearly a decade and a half in them to make them fully self reliant, providing them fresh drinking water, sanitation facilities, medical facilities, enhancing their income standards by imparting vocational training and agricultural innovations. However, BPCL also firmly believes that the only vehicle for raising the villagers from their present state is by educating the young and the old, a focus on providing grants for opening schools and opening adult literacy camps as well.

INDIAN OIL

Indian Oil has a concerted social responsibility programme to partner communities in health, family welfare, education, environment protection, providing potable water, sanitation, and empowerment of women and other marginalised groups. Indian Oil has always been in the forefront in times of national emergencies. Indian Oil People have time and again rallied to help victims of natural calamities, maintaining uninterrupted supply of petroleum products and contributing to relief and rehabilitation measures in cash and kind. Indian Oil's community-focussed initiatives include allotment of petrol/diesel station dealerships and LPG distributorships to beneficiaries from among Scheduled Castes, Scheduled Tribes, physically handicapped, ex-servicemen, war widows, etc. The Corporation has also unveiled kisan seva kendras as small-format retail outlets to reach quality products and services to people in the rural areas. Indian Oil has also set up the Indian Oil Foundation (IOF) as a non-profit trust to protect, preserve and promote national heritage monuments. The Corporation also supports a variety of endeavours in arts, culture, music and dance, apart from organising programmes on its own under the banners of Indian Oil Art Exhibition, Indian Oil Sangeet Sabha and Indian Oil Kavi Sammelan.

ACC

ACC has undertaken social volunteering practices almost from its inception, long before the term corporate social responsibility was coined. The company's earliest initiatives in community development date back to the 1940's in a village on the outskirts of Mumbai while the first formal Village Welfare Scheme was launched in 1952. The community living around many of our factories comprises the weakest sections of rural and tribal India with no access to basic amenities. Its community development activities revolve around the under-privileged community that lives in the immediate vicinity of the cement plants. The range of activities begins with extending educational and medical facilities and goes on to cover vocational guidance and supporting employment-oriented and income-generation projects like agriculture, animal husbandry, cottage industries by developing local skills, using local raw materials and helping create marketing outlets .At all our cement factories ACC share amenities and facilities with members of the local community. This includes sharing education and medical facilities, sports, recreation, access to Bore Wells, drinking water and the usage of colony roads.

COLGATE'S PROJECT JAGRUTI

In the year 1998 Colgate started project Jagruti , the rural hygiene drive along with the Indian dental Association. This project covers 60 lakh people in 20,000 villages, out of which 15,000 villages had no experience to the availability of toothpaste and tooth powder. The aim of the drive is to promote the brand in rural areas but the overall strategy is also spreading the vital information of oral hygiene among the lesser aware rural people.

CHAMBAL FERTILISER'S UTTAM BANDHAN

Uttam Bandhan , the community welfare initiative launched by the K.K. Birla group's flagship company Chambal Fertilisers and chemicals ltd (CFCL) in Rajastan in the year 2000. Under this programme , CFCL trains unemployed rural youth as extension workers known as krishi sewaks, who interact with the farmers and advise them .

HUL'S VINDHYA VALLEY PROJECT

In the year 2000 HUL helped state owned Khadi Board through an advisory relationship with the government of Madhya Pradesh. It helped the board to brand local produce from villages and tribal areas such as natural honey collected from forests in the state under the brand name Vindhya Valley. The product range includes edible products like papads, pickles, masala and turmeric. HUL provided the corporate expertise, marketing acumen and quality parameters, while the state government bore the marketing expenses for the brand building.

ITC'S CSR INITIATIVE

ITC has taken a good number of social initiatives in rural areas around its plants, which are helping both the population of adjoining areas and the organisation itself. These developmental efforts are providing meaningful employment opportunities in the village itself. One of the CSR initiatives is Sunehra Kal ( Better Tomorrow). It is a social forestry project which was launched around its Bhadrachalam plant in Andhra Pradesh. This programme targeted at economically backward communities , living below the poverty line involves forestation, soil and water conversion, community development, health and sanitation, education and watershed management.

CONCLUSION

Even though companies are taking serious efforts for the sustained development, some critics still are questioning the concept of CSR. There are people who claim that Corporate Social Responsibility underlies some hidden motives while others consider it as a myth. Is CSR really a stalking horse for an anti-corporate agenda? The reality is that CSR is not a tactic for brand building. Indulging into activities that help society in one way or the other only adds to the goodwill of a company. Rural people can become a viable market for the corporate with a developmental approach of social marketing. Organisations can launch social responsibility initiatives in order to build brands in the rural areas. The social responsibility initiatives are far more effective in building brands in rural market than the commercial advertisements.

REFERENCE

Badi, R.V and N.V Badi (2006), Rural Marketing, Hhimalaya Publishing House, New Delhi

Gopalaswamy, T.P, (2008) Rural Marketing Environment, Problems and Strategies, Vikas Publishing house, New Delhi.

Paul, Justin ( 2008 ), Business environment : texts and cases, TATA-McGraw Hill companies, New Delhi.

www.recindia.nic.in/

www.lafarge-cement.co.in/

www.adityabirla.com/
 


Nihar Mohapatra
Lecturer
Global Institute of Management
Bhubaneswar

Tapas Ranjan Moharana
Sr. Lecturer
Global Institute of Management
Bhubaneswar

Arjuna Charan Behera
JRF(ICPR)
Utkal University
Bhubaneswar
 

Source: E-mail March 30, 2009

          

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