CSR – APPLICABILITY OF KOTTER’S MODEL OF CHANGE IN THE MARKETING OF THE PRODUCTS OF COMMUNITY BASED ORGANIZATIONS (CBO)

FROM BOTH THE CORPORATE AND CBO PERSPECTIVE

LOYOLA COLLEGE, - DR. T. JOSEPH M.COM., M.PHIL., MBA.,PHD.,

CHENNAI ASSOCIATE PROFESSION, COMMERCE DEPARTMENT

- SUNDAR A. RODRIGUEZ M.COM.,FCA.,DISA.,CFSA(USA).,

RESEARCH SCHOLAR, COMMERCE DEPARTMENT

CORPORATE SOCIAL RESPONSIBILITY AN OVERVIEW

• Though the corporates had been for sometime doing something under the ambit of social responsibility, the Indian Companies Act, 2013, has made Corporate Social Responsibility (CSR) mandatory vide Section 135.

• Section 135(1): Every Company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crores or more or a net profit of rupees five crore or more during any financial year shall constitute a CSR Committee of the Board consisting of three or more directors out of which at least on director shall be an independent director.

• The Government had notified by GSR 130€ dated 27th February 2014, various activities that can be carried out by the company under CSR.

ACTIVITIES RELEVANT FOR THIS STUDY

• Schedule VII lists out the activities that could be carried out under CSR Program

• For the sake of relevance to this paper the entries to Schedule VII, namely (ii) and (v) are taken into account.

• Schedule VII(ii) covers – promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects.

• Schedule VII (v) covers – protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts.

• Training including skill training and also development of traditional arts and handicrafts, results in products either incidental to the activity or as output, which on a continuous basis would result in production of goods, which require marketing.

OBJECTIVES OF THE PAPER

• (1) To study the factors affecting the implementing the Corporate Social Responsibility (CSR) from marketing perspective,

• (2) To ascertain ways and means to use the change management concept in the marketing of the CSR program products; and

• (3) To find ways to integrate the Kotter 8 stage model of change in the change management from the perspective both of the corporates and the implementing agencies.

METHODOLOGY

• This is based on the Conceptual Research concept, mainly because the impact of the CSR on marketing would only be known at the end of this financial year and there is no primary data as of now, and this is done relying on the secondary data and review of the literature including the appropriate statues and the theoretical framework for the change management.

CSR AND MARKETING – NEED FOR CHANGE AND ITS MANAGEMENT

• The NGOs lack skill set, especially the marketing, hence the products produced by their intervention through various CBOs could not be marketed and hence the programs had failed, this is mainly due to their orientation towards empowerment, sustainability, people first etc., with scant respect for making “profit”

• The corporate driven by their profit motive are strong in marketing as a whole; however, they lack “humaneness” which is the thorn in the flesh as looked by the NGOs

• These divergent views affect the marketing of the products, hence there is need for some “give and take” between these two players.

• This give and take requires the change process in both the entities – Corporates as well as the NGOS.

KOTTERS MODEL OF CHANGE

EIGHT STEPS – IMPACT ON CORPORATES & NGOS

Diagrammatic Representation of 8 step Kotter Model of marketing of CSR program products from the view point of corporates and the implementing agency

8 Step Kotter’s model of Change Corporate Implementing Agency

Create a sense of urgency There is already a sense of urgency on the part of the corporates, as the time frame for CSR activities and its quantum had been specified in the Companies Act, hence there is urgency on their part.

Having come to know of the quantum of the funds that are going to pumped into their sector, NGO/CBO are already not only aware of it, but had started to pitch strongly through various forums for their share of funds and support.

EIGHT STEPS – IMPACT ON CORPORATES & NGOS (CONTINUED)

Form a guiding coalition Section 135 of the Companies Act, had clearly laid down the way in which the corporates who are covered under CSR to go about implementation of the program by the formation of the CSR committee, it even talks about its composition including the need for the independent director to be part of it.

The NGO on their part had formed forums where they have arranged for the meeting of minds with the corporates. In this forms, the coalition of both the corporates and the NGO/CBOs are taking place.

Create a vision The corporate culture of accountability and having a clearly drafted Mission and Vision statements would percolate down in all the activities including the CSR carried out by them, however, the same would require some fine tuning as it would not be in line with the generally accepted not for profit organizations with people taking precedence over profit.

The NGO/CBO on their part had to clearly draft their Key Performance Indicators that are imbibed in their programs to be articulated in a better way to be in line with the business vision and mission statement.

Communicate the vision The vision has to be communicated amongst the stakeholders in proper manner. In case of the corporate the stakeholders are clearly defined and identifiable hence communicating the vision to them would be easier.

Unlike the corporate the implementing agencies do not have a clearly defined and identifiable stakeholders, and even if they list them it is overwhelming, they talk in the way to identify with the whole world, but that is how they are.

EIGHT STEPS – IMPACT ON CORPORATES & NGOS (CONTINUED)

Empower others to act on the vision

Since two parties with divergent views and mission come together in the CSR marketing, it would be better if it results in a compromise on the approach, as the approach to the marketing from the corporate would be to maximise profits, whereas for the implementing agency there could be other priorities. These should be sorted out through mutual empowerment. The Corporate should try to imbibe the concept of earning income more than expenses (a euphemism for profit) to sustain the operation to the implementing agency.

The implementing agency should be more open towards the concept of “profit” from the sustainability point of view in case of marketing of the products produced through CSR programs. The implementing agency should try to empower the corporate to be more humane as profit is not “everything”.

Create Quick Wins The partnership of corporate and implementing agency should focus on short term targets than to have long term one. The short term target for the CSR program from the marketing perspective for example could be reaching the market to the time tested corporate network for brand building of the products and of the implementing agencies etc.This short term quick win situation or targets would propel the CSR with upward mobility.

The implementing agency should focus on short term targets than to have long term one. The short term target for the CSR program from the marketing perspective for example could be assignment of the production process in the supply chain management to the weaker sections, reaching out to the markets through the community based network of etc.

EIGHT STEPS – IMPACT ON CORPORATES & NGOS (CONTINUED)

Build on the Change Having tasted the success of the quick wins, based on the common platform of ideas in the same language between the two divergent partners, would make them believe that change has done good, and that would make them build on the change, resulting in better marketing strategy.

Having tasted the success of the quick wins, based on the common platform of ideas in the same language between the two divergent partners, would make them believe that change has done good, and that would make them build on the change, resulting in better marketing strategy.

Institutionalize the change. The change which has taken place has to be institutionalized within the CBOs who ultimately has to take up the responsibility, as the corporates and NGO (the facilitator) could not hold its hand forever, but at one point leave them to manage their affairs. Likewise the corporates too have to move on for they would not be interested in getting tied down in one program. Hence this process of institutionalization of change especially with regard to the marketing of the products of the CSR program is crucial.

The concept of “leaving and moving forward” is what the NGOs want to do, but due to lack of institutionalization of the change concepts which had resulted in tangible results they could not do it.Hence this process of institutionalization of change especially with regard to the marketing of the products of the CSR program is crucial.

MAJOR FINDINGS

• The CSR program implement with special reference to the projects suggested in Schedule VII (ii) and (v) gives rise to the production of products in one form or other, and that would require a proper marketing strategy to sustain the efforts. However due to the divergent views of the partners in this, namely the corporates on one hand with “maximisation of profits” ideology and on the other hand NGO/CBO for whom “people” comes first, it is essential to make the marketing successful, to have a change process of their mind-set and also the strategy for marketing. This could be achieved by linking the 8 steps process for change by Kotter.

RECOMMENDATIONS

• The 8 step model of change advocated by Kotter gives a structured framework to pursue the change management in the process of marketing of the products produced by implementing the CSR Projects. The success in implementing the same would be the open minded approach of both the parties concerned. This open approach and burying the hatchet of different terminologies by adopting common terminology for the marketing of the products and for the CSR program in general would go a long way in making the CSR Program a successful and sustainable program.

QUESTIONS

THANKS

THANKS

• Loyola College, - Dr. T. Joseph M.Com., M.Phil., MBA.,Phd.,

• Chennai Associate Profession, Commerce Department

• - Sundar A. Rodriguez M.Com.,FCA.,DISA.,CFSA(USA).,

• Research Scholar, Commerce Department