Corporate Social Responsibility

The globalization has transformed the corporations as powerful entities. The MNCs have turnovers greater than GDP's of few countries. They have grown financially stronger and their scale of business is creating impact on society and environment and these environmental and social issues are being put in limelight. Transparency and accountability are turning out to be the vital elements and making it difficult for these corporations to escape from scrutiny. So, it is no longer a question about whether or not to act ethically, but rather how. My answer is, lay focus on social responsibility policies and practices.

Yes, a corporation's focus on social responsibility will definitely show a positive effect of the bottom line by strengthening profits, enhancing the brand recognition and reputation, reducing risk in case of emergency and misconduct, soothing employee relations and engagement. These initiatives or policies must include economic, legal, environmental and philanthropic responsibilities.

Each day, we turn on television or read newspaper; we come across yet another new scandal. These scandals have brought lack of trust on corporations and hence the corporations consider the trust in frontline. I want to illustrate a case with Satyam Computer Services ltd, a consulting and IT services company of India. It has very good recognition in IT industry for its quality of service. As a part of social responsibility initiative, it has undertaken the development of rural infrastructure. The 108 emergency service offered by this company created a sensation all over India. The reputation among people was such that, every IT career aspirant's desire was to work for Satyam. But, at some point, the company failed to follow business ethics. The company had overstated its profits and understated debts, giving its shareholders a false profile of the company's economic condition. The company filed for bankruptcy and 5,000 employees were fired. In total 15,000 workers lost their jobs. Tech Mahindra, another IT services company has acquired Satyam. Here, I want to stress an important point. It took a very short time for Satyam to regain its market position and brand value. In the past, the company has won the trust and confidence of the investors with its quality of service. The employees did not hesitate to join again this company because they still remember the company's initiatives towards the well being of employees and society. Hence, it is clear that, if a corporation shows its concern on society and community in which it thrives, the reputation and brand image is going to be built; the confidence in employees will last longer and the organization can mollify any mishap in its functioning.

In my observation, customers are not only concerned about the quality or price of a product/service but also about the way they have been produced and if the process has harmed the society, its resources