Monday, 2 January 2017

The New Paradigm in Corporate Social Responsibility (CSR)

Example-1:       A typical CSR program of organizations we see in general. 

  • Rural education imparted from 1st to 10th class at a school in Goregaon, Dist. Pune., Maharashtra, India. 
  • Major Roll in constructing five Primary Schools in villages surrounding our factory location. 
  • Funding to an orphanage. Employment to nearby rural population.

Example-2: A typical example for the new paradigm.

We give people skills to thrive in a connected world, empowering them to be global problem solvers and speed the pace of social change. That's impact multiplied.” - CISCO Systems 

A new generation of corporate entities called, “Social Enterprises” have come up in the last few decades who believe in simultaneously fulfilling the twin objectives of Profit-Making (not profiteering) and contributing to the society in which they exist. Here the difference is that they are not after “profiteering” by only concerned with “Profit-Making” or Profitability. 

This has forced the corporate world to do a SWOT analysis of their CSR policies. The traditional CSR policies usually end up in “giving it away” style in which the impact is less as well as it leads to bitterness among the beneficiaries. 

For example, if in a rural community, a corporate is giving financial assistance for a specific reason under some specified criteria, then those who don’t receive the benefit become envious on those who received and the perceived idea about that particular company will be such as ‘partial, unreasonable, etc. etc.’ So, the CSR activity which is supposed to enhance the image of the company in the perception of the masses has resulted in chaos and negative image. We can site innumerable number of such examples. 

On the contrary, the Social Enterprises (SEs) make the beneficiaries as stake holder and make them participatory. The participants can be chosen based on clearly marked out criteria which are usually transparent to the community. Also, they chose such an area where the impact of the CSR is to the maximum. This style of functioning of SEs has made a drastic impact on the corporate in the positive direction. This is resulted in the New Paradigm of CSR where the corporate have modified their CSR policies and activities. One such example is Cisco Systems India.  

In one of the CSR activities of Cisco, it had trained the Diploma Engineering students of the rural areas in Bangalore on Cisco products. This had led to enhancing the employability of the students. And these trained diploma engineers were employed by Cisco’s customer who were too happy to get engineers trained by Cisco itself. It solved the human resource problem of Cisco’s customers. In this case, it is a win-win situation for all the stake holders – Cisco, the diploma students from the rural areas, as well as Cisco’s customers. All this happened a decade ago when the attrition rate in the IT field was at a maximum and Network Engineers were in huge demand. 

In addition to this win-win situation, it is interesting to note that EVEN the CSR spending resulted in enhancing the business of Cisco. The impact of this type of CSR activity is unimaginable. In management terms, if we analyze the cost-benefit ratio of this usually “revenue” expenditure – an expense becomes multiplied-income (in the form of benefit to Cisco’s customer satisfaction, the community’s perception about Cisco, the heart-feelings of the youth trained). 

Let us read again Cisco’s CSR policy which was given in the beginning of this article with the new paradigm in mind.

“We give people skills to thrive in a connected world, empowering them to be global problem solvers and speed the pace of social change. That's impact multiplied.” - CISCO Systems.

In summary, the new paradigm is
- Participation of all stake holders in the CSR programme including the beneficiaries. 
- Choosing an area where the impact will be at the maximum. 
- Choosing an area where the benefit is continuous, such as a chemical chain reaction and eventually can become self sustaining in the long term. 

Prof. Beaulah Moses 
Vikrant Institute of Technology Management Gwalior, Madhya Pradesh – 474 006

(This is an original article written by the author based on her personal observations over the decades by learning about the successful social enterprises such as Aravind Eye Hospital & Research Institute, Madurai, CMC Hospital, Vellore, The Ramakrishna Mission, Coimbatore, Venu Eye Hospital, New Delhi, etc. The views are personal.) 

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