report group 11

8/3/2019 Report Group 11

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Topic : Brand Enhancement through CSR in Corporates

Group 11

Group Members

Shreya Khatri (224)

Amruta Padwal (208)

Lalitkumar Gangwar (235)

Preeti Suchdev (231)

Sanket Suratwale (238)

Prashant Kale (197)

Introduction

In times where India Inc showing its growth in GDP and the Governments new company

bill making mandatory for corporate to earmark part of their profit for corporate social

responsibility (CSR) initiatives and inspite of having such life size successful examples of

companies like TATA and BIRLA , CSR in India is in a very nascent stage.

Though CSR is not new to India, companies like TATA and BIRLA have been imbibing

the case for social good in their operations for decades long before CSR become a popular cause.

It is still one of the least understood initiatives in the Indian development sector. It is followed bya handful of public companies as dictated by the very basis of their existence, and by a few

private companies, with international shareholding as this is the practice followed by them in

their respective foreign country. Thus the situation is far from perfect as the emphasis is not on

social good but rather on a policy that needs to be implemented.

Industrialization and commercialization of service sector have explored vivid avenues of

progress to a nation but at the flip side it rooted the use of non-renewable energy sources, global

warming, greenhouse gas emissions and rising levels of waste which have pernicious effects to

the generation coming next. The growing concerns for sustainable development, environmental

performance, encompassing pollution control and stewardship of natural resources gave massrecognition to the concept of Corporate Social Responsibility (CSR). The integration of CSR

principles in operating activities of business is very much imperative to ensure sustainable

development of an economy. The potential benefits of CSR have generated interest of regulatory

authorities, society, NGOs, employees, customers as well as international bodies to the issue. In

financial sector several international initiatives like United Nations Environment Programme

Finance Initiative, Global Reporting Initiative, Equator Principles and Collavecchio Declaration


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on Financial Institutions are underway to ensure the adoption of CSR practices in normal

business operations. These initiatives have favorably tuned up developed countries to behave in a

socially responsible manner. But in developing nations, there is a dearth of deliberate and

effective actions to the current need. In addition to this a very limited research work has been

done to investigate the CSR practices in developing and emerging nations. In fact the academic

publication on this fiery issue is primarily western centric. Most of the CSR studies conducted so

far have been in the context of developed countries such as Western Europe, the USA and

Australia and we still know too little about practices in ex-colonial, smaller, and emerging

countries.

2 Section 172 of the Companies Act 2006 imposes a duty on directors to promote the

success of the company, and in doing so to have regard to: the long-term consequences of any

decision; the interests of employees; the need to foster the companys business relationships with

suppliers, customers and others; the impact of operations on the community and the

environment; and the desirability of the company maintaining a reputation for high standards ofbusiness conduct.

Economic drivers for corporate social responsibility

Drawing on the experiences of those companies that have adopted corporate social

responsibility, commentators have identified several ways in which this approach to business

decision-making may lead to improved financial performance.

The following economic drivers have been identified by the World Economic Forum

and Business in the Community as explaining the voluntary adoption of corporate social

responsibility by companies across the world (ADL 2003). It is suggested that these drivers do

not operate in isolation, and that different companies may have different drivers. Various driversmay also be stronger in different sectors and for

A move to adopt corporate social responsibility may arise from a combination of drivers

which are as follows:

y Employee recruitment, motivation and retentiony Learning and innovationy Reputation managementy Risk profile and risk managementy

Competitiveness and market positioningy Operational efficiencyy Investor relations and access to capital, License to operate

From the consumer point of view, Brand Image is an important aspect as the customer

perceives the brand one buys/likes. A company with CSR activity in its kitty adds value as well

as changes the Image. A brand's "extendibility" depends on how strong consumer's associations

are to the brand's values and goals.


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Literature Review

According to the Research conducted by Journal of Ethics it investigated: first, the effects

of CSR and corporate reputation on industrial brand equity; second, the effects of CSR, corporate

reputation, and brand equity on brand performance; and third, the mediating effects of corporate

reputation and industrial brand equity on the relationship between CSR and brand performance.

Today Organizations dont rely heavily only on marketing or developing new products

but also they undertake various other activities in the form of Corporate Social Responsibility

(CSR) which is believed to attract more number of end consumers towards the particular brand

and thereby enhancing its brand value. Furthermore, the focus of CSR research has shifted from

why to what to how, i.e., to adopt CSR practices most compatible to business strategy

to bring about maximum outcomes for both the rm and the society (Basu and Palazzo, 2008).

Many studies in consumer markets have also indicated that CSR and corporate reputation induce

positive brand perceptions of a corporations products. This research denes CSR as voluntaryactivities taken by corporations to enhance economic, social, and environmental performance

voluntarily. There are various debates on what effect CSR really has on a certain organization.

McWilliams (2006) pointed out that CSR should be considered as a form of strategic

investment which can be viewed as a form of reputation building or maintenance. On the

other hand, Fombrun (2005) proposed enhancing corporate reputation as an extrinsic motivation

for companies to engage in CSR activities. Garberg and Fombrun (2006) also drew reputation

gain as relevant outcomes of CSR programs. Finally, Bendixen and Abratt (2007) studied a large

South African MNCs reputation in supplierbuyer relationships, indicating that the buyers

ethical perception about suppliers constitutes the basis of corporate reputation.

CSR and corporate reputation arouse customers emotional perceptions about the rms

they deal with, leading them to associate their perceptions with the brands they intend to

purchase, thus developing brand equity as well as enhancing corporate reputation of suppliers

who supply these brands. These in turn result in higher brand performance and also enhances the

brand preference towards a product.

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. Corporate Social

Responsibility in corporate is the continuing commitment by business to behave ethically and

contribute to economic development while improving the quality of life of the workforce and

their families as well as of the local community and society at large.

KPMG made survey which more focus on the companies to discern emerging trends in

corporate responsibility reporting. The CSR agenda for most companies include education,

health care, HIV/AIDS and community development but there is minimal clarity on how

companies decide on such CSR projects. The goal of the study was to provide insight into the


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overall Corporate Responsibility (CR) strategies and approaches adopted by the top Indian

companies and the CR-related reporting and assurance trends. According to survey conducted by

them shows that their reports do not touch upon governance for sustainability and lack focus on

CR metrics and performance. Proper rules do not on CR activity. It not only focuses on 1 or 2

companies but also give insights of its CSR activity that they are carrying like 21% of the

companies disclose their Green House Gases (GHG) emissions or only 16% of top 100

companies have a CR strategy in place.

Nokias CSR can be understood as an entity with four aspects: 1) employees, 2) supply

chain, 3) environment, and 4) community. In Research report, CSR is considered very important

for Nokias brand and reputation, on the business benefits side important targets include shaping

corporate culture, minimizing risk, enhancing efficiency and building company reputation.

Transparency and both internal and external communication is considered important to

build trust and company reputation.

In another report, Bharat Petroleum Corporation Limited has adopted 37 villages as their

responsibility to develop in all occupations. It has made efforts to make them self-reliant,

provided them fresh drinking water, sanitation facilities, medical facilities, vocational training

and literacy camps. In research finding it got that brand enhancing is their second objective but it

gives customer satisfaction. BPCL incurring Expenses on CSR activity.

CSR is now an integral part of corporate governance for many firms. Given the

increasingly important role, which marketingplays in corporate governance. Many companies

like The aviation and ICT industries are also under heavy scrutiny by government, industry

groups and environmental activists for their carbon footprint. These stakeholders are not

generally the target of branding campaigns by these industries; yet, companies like Easyjet and

IBM are keenly aware that their CSR records directly affect their brand associations in the minds

of consumers. CSR influences corporate branding strategy from a holistic point of view which

includes all stakeholders


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Research Gap:

In the above researches the impact on consumer preference for the product of the

Companies involved with CSR activities was not studied. Their preferences whether

favorable or unfavorable while selecting products makes an impact on brand image, sales and

awareness among consumers

Objective:

To study the consumer preference for products of companies involved towards CSR

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Documents