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Understanding the term: -Corporate Social Responsibility (CSR)

18/06/2011

CSR is also referred to as Corporate Sustainability by organization, because social responsibility is increasingly being looked at as a necessary ingredient to sustain the corporations in long run. CSR as a concept is about the usage of the wealth generated as a result of development. CSR says that this wealth should not only power the business but should also be ploughed back in the conservation and enrichment of environment and for greater prosperity of the community. CSR describes a company's commitment to be accountable to its stakeholders. CSR demands that businesses manage the economic, social and environmental impacts of their operations to maximize the benefits and minimize the downsides. Effective CSR today is that which relates directly to the giver's core competencies and offers real value, not just philanthropy. It is no longer considered good for business, but simply good business.
CSR is a container concept, which encompasses many different ecological, social and economic issues. Following is a diagram highlighting the factors covered under each of these issues.

Why Should Corporation Practice CSR

CSR is not only about fulfilling a duty to society; it should also bring competitive advantage. Through an effective CSR programme, companies can:

• Reduce costs, and ensure long term sustainability of the business
• Improve access to capital
• Sharpen decision-making and reduce risk
• Enhance brand image leading to stronger business performance
• Uncover previously hidden commercial opportunities, including new markets
• Ability to attract, retain and motivate employees
• When you give back to the society you operate in, you become truly embedded in that society, rather than being perceived as seeking profits alone
• Improve sales as customers globally are becoming increasingly conscious about the product and services they purchase, and the environmental impact of the same
• With high-profile corporate scandals dominating news headlines, the general public is becoming increasingly cynical towards corporations and holding them accountable for their behavior and actions
• Maintaining positive public goodwill is essential for strengthening a company's reputation in the marketplace. In addition, it can also be used as “social insurance” for weathering a crisis in the future

“CSR could prove to be a valuable asset in an age of mergers and acquisitions, especially as it helps companies spread their brand name”
-Sudhir Kumar Sinha,
(Group vice-president of Anil Dhirubhai Ambani Group)

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