INTRODUCTION

Understanding the concept of Corporate Social Responsibility:

Corporate Social Responsibility (CSR) also referred as corporate conscience, corporate

citizenship, social performance, or sustainable, responsible business. In other terms, the
purposeful acquiescence of social and environmental conscientiousness of
companies/firms/corporations is called Corporate Social Responsibility (CSR). CSR policy
functions as a built-in, self-determining apparatus whereby business monitors and guarantees its
active compliance in essence to the spirit of the law, ethical standards, and intercontinental
regulations. The target of CSR is to grip & hold responsibility for the company's actions and
promote unique positive impact through the activities on the environment, consumers,
employees, communities, stakeholders and all other members of the public domain.

Figure 1.2: Framework of CSR (Morsing & Thyssen, 200, 14). Actors that have participated in
shaping the framework of CSR.
Moreover, CSR-focused businesses would proactively promote the public interest (PI) by
encouraging community growth and development, and voluntarily eliminating practices that
harms or can harm the public sphere, regardless of legality. CSR is the deliberate inclusion of
Public Interest (PI) into corporate decision-making that remains as the core objective of the
company or firm, and the honoring of a triple Ps, people, planet, & profit.

Corporate Social Responsibility (CSR) is usually used to describe any business’ initiatives to
obtain sustainable outputs by committing to favorable business practices and standards. The key
role and accountabilities often discussed with the aspects of business, society and the
environment. According to the definition coined by Angelidis and Ibrahim (1993), corporate
social responsibility is ‘corporate social actions whose purpose is to satisfy social needs’.
Corporate social responsibility requires investment and gains many positively fruitful measurable
outcomes.

Corporate Social Responsibility (CSR) becomes a progressively more imperative activity to

businesses nationally and internationally. As globalization initiates, expands & grows step by
step and the large or giant organizations serve as global providers, these corporations have
successively recognized the benefits of utilizing CSR programs at various locations. CSR
initiatives now are undertaken throughout the globe, & are now becoming an integral part of the
corporate practices.

The term is habitually used interchangeably for other terms such as Corporate Citizenship and
also coupled with the value of Triple Bottom Line Reporting, which observed as a framework for
measuring an organization’s performance against the financial/economic, social and
environmental parameters.

In conceptualizing corporate social responsibility, there are differing perspectives predominantly

in its delineation. There are four different themes that emerge from the literature concerning
corporate social responsibility, which can be noted down namely as:
 Management of stakeholder concern,
 Economic viability,
  Ethical practices and
 Philanthropic actions
(Carroll, 1979; Robin and Reidenbach, 1987; Maignan and Ferrell, 2004; Luo and Bhattacharya,
2006).

Other researchers, however, suggest that corporate social responsibility is not only concerned
with the corporate social obligations but even beyond that. For example, Vaaland, Heide and
Gronhaug (2008) suggested that corporations proactively need to manage the stakeholder
concern for the sake of ethical, social and environmental phenomena to the benefit of the
corporation, while Castaldo, Perrini, Misani and Tencati (2009) tie corporate social responsibility
to fair trade products. However, while Vaaland et al. (2008) considers a corporation’s liability to
cover the environment, the dominant duty & dependability of the corporation is first and
foremost to the society.

As the word suggests, corporate social responsibility is primarily concerned with the corporate
commitment towards the stakeholders and towards the society to which it belongs. The term
'social' is a derivative of society connected to the relationship and more widely the well-being of
a community. Robin and Reidenbach (1987) establish that businesses enter into a relationally
based convention with society, with certain obligations and also with certain duties. Business and
society are mutually dependent and are affiliated (Joyner and Payne, 2002).

The obligations placed on the business houses to perform in such ways that are acceptable to
those they are connected. The environment is as a consequence an indirect apprehension of
corporate social responsibility strategies.
 Understanding the concept of Corporate Branding:
A corporate brand is a power of brand derived from the goodwill and name, a recognition that it
has yielded over time, which translates into higher sales volume and higher profit margins
against competing brands.

David Aaker very beautifully has explained brand equity in his study “Building Strong
Brands” as, "Brand equity refers to as a set of assets (and liabilities) associated with a
brand's name or symbol that adds to (or subtracts from) the value achieved from a product or
service to a firm and/or that firm's customers.”

Figure 1.3: Brand Equity

The major asset categories are:

1. Brand Name Awareness

2. Brand Loyalty
3. Perceived Quality
4. Brand Associations
 Components of Brand Equity

Figure 1.4: Brand Equity Components (Aaker, 1991, 15).

 Understanding the Concept of Corporate Sustainability
Business is necessarily dependent upon society (Joyner and Payne, 2002) and to the environment
in which it functions. There is growing global shift in awareness toward the opportunities that
sustainable business practices presented by the corporate (York, 2009). Furthermore, the
regulatory compliance, stakeholder pressures (Bansal and Roth, 2000) and growing concern for
the environment (Polonsky and Mintu-Wimsatt, 1995; Menon and Menon, 1997) for sure are
referring corporation’s changeover toward sustainable practices.

There is an emergent segment of the consumers that illustrate positive changes in their
purchasing intentions toward businesses that are indicative of environmental responsibility
(Menon and Menon, 1997). Corporations & firms necessitate employing proactive strategies
(Zeithaml and Zeithaml, 1984) to acquire benefit of this emerging environmental awareness
(Menon and Menon, 1997). Further, Peattie (2001) contends that while firms should seek to
reduce their environmental footprint this is a simplistic view of sustainability concern again.

Peattie (2001) proposes that sustainability involves insertion of a prominence upon customer
needs, congregating these needs, obtaining organizational goals through a process that is
compatible with the eco-systems. The significance steadily increases the necessity to develop
sustainable consumption (Dolan, 2002; Schaefer and Crane, 2005) and promote business
practices (Bansal and Roth, 2000; Dechant and Altman, 1994; Miles and Govin, 2000). The
concept of sustainability is equally gaining standing reputation in practitioner and academic
dialect (De Chernatony, Harris, and Riley, 2000; Brady, 2003; Gad and Moss, 2008).

Hence, it is to be noticed that the Sustainability of any Brand through improved Brand Equity
may easily be accomplished through the inclusion of CSR practices for society, customers, and
environment as a whole.
 CSR and Brand Management:

Which Role can CSR play in building Brand Equity?

• 86 percent of the consumers responded that they would perceive more positive opinion towards
a firm that is doing something to make the world a better place, irrespective of the causes or
issues concerned.

•There is a strong link between CRM, Brand Affinity, Brand Equity, actual consumer perception,
loyalty and buying behavior.

Source: A Research International study in 1996 in the UK of 1053 consumers done on behalf of
Business in the Community.

CSR implies to the concept that business has wider & elongated societal interests to consider not
just the financial interests of the organization (Sen and Bhattacharya, 2001). In addition, to
congregate societal obligations, proponents have also argued that a more socially responsible
organization will engender or provoke enhanced business performance, as well as greater
customer-based brand equity.

However, this broad-spectrum inventiveness has been challenged and indeed it is not clear what
particular CSR initiatives would be likely to build greater brand equity than other CSR
initiatives. Furthermore, Polonsky and Jevons (2006) make a reminder that the relationship
between CSR and branding has yet not explored adequately. This research aims to tackle a gap in
the understanding towards the relationship between contemporary CSR practices, and the
consequential performance outcomes beneficial for the business organizations.

More specifically, the research seeks to investigate whether in particular CSR activities can
increase the Corporate Brand Equity?
 Evolution & Emergence of Fundamental CSR Theories over time:

Figure 1.5: A corporate responsibility landscape (McElhaney, 2008, 230).

 Table 1.1: Fundamental CSR theories and the respective changes over time:
Theory Author Purpose
Agency Theory Friedman (1970) CSR is indicative of self-serving behavior on
part of top management and reduces
shareholder wealth
Stakeholder Theory Freeman (1984) Managers must satisfy a variety of
constituents
Resource-Based-View of Wemerfelt (1984) and Presumes that firms are bundles of
The Firm(RBV) refined by Barney (1991) heterogeneous resources and capabilities that
are imperfectly mobile across the enterprise
Social Contract Theory And Donaldson & Dunfee Consent of the governed to be governed (i.e.,
Integrative Social Contract (1994) within the space of SMEs and CSR, there
Theory remains a need for a “detection and scanning
of, and response to, the social demands that
achieve social legitimacy, greater social
acceptance and prestige”
Classical Economic Theory Jones(1995) ‘Laissez faire’
Institutional Theory Jennings & Zandbergen Analyzes the role of institutions in shaping the
(1995) consensus within the firm regarding the
establishment of an “ecologically sustainable
Organization”
Theory-of-the-firm McWilliams &Siegel “Profit maximizing” CSR
(2001)
Economic and Market Value Barney (2001) Value is created when customers are willing
Creation to pay more for products and/or services
provided by firms than the cost of their inputs
Strategic Leadership Theory Waldman, Siegel, & Focusing organization’s strategic direction
To CSR Javidan (2005)
Social Capital Theory Perrini (2006) Social capital refers to connections among
individuals and social networks and the norms
of reciprocity and trustworthiness that arise
from such that can improve the efficiency of
society by facilitating coordinated actions
Concept of Competitive Porter & Kramer(2006) The creation of competitive advantage occurs
Advantage through the implementation of strategies that
add value and create benefits for an enterprise.
If corporations were to analyze their prospects
for social responsibility using the same
frameworks that guide their core business
choices, they would discover that CSR can be
much more than a cost; it is source of
opportunity, innovation, and competitive
advantage also.
Figure 1.6: The shift in CSR as strategy over time.

The changing internal and external environment of business houses have influenced the way of
perceiving, identifying, implementing and investing the most important resource; the Money
Resource, for the Brand recognition, which gradually followed by the Brand Reputation or the Brand
Equity (Brand Image) as the end product.
Where and why should the Corporate Houses invest their Money Resource?

What outcome would they receive?

Whether their investment would fetch the purpose of Improved Brand Building?

Does CSR is an excellent area to invest? Moreover, gaining for what?

Does CSR investment option is, in fact, a smart decision?

How much to invest in CSR?

Which CSR practice is best?

Does CSR work as a Marketing Strategy?

Do people recognize CSR as the genuine effort?

Will people be accepting CSR as effort apart from marketing plan?

Does CSR act as a Corporate Philanthropy?

Does CSR act as Risk Management?

Does CSR act as Value Creation Technique?

Does CSR serve the Purpose?

What Impact would CSR provide?

What benefits could be gained due to CSR?

Will it influence Customer buying or Purchasing Decision?

Whether it will serve the Customer Loyalty?

Does it provide Brand Awareness?

Will it Provide Brand Recognition?

May it cater to Brand Identification?

Does CSR give Brand Loyalty?

Will CSR develop the Brand Image?

CSR improves Brand Equity?

DOES CSR HELPS IN CREATING THE OVERALL BRAND AND BRAND BUILDING?
 Drivers of CSR

Figure 1.7: Corporate Social Responsibility Survey 2002 – India

(United Nations Development Program, British Council, CII, PriceWaterHouseCoopers

The key drivers for CSR are:

Enlightened self-interest- It creates a blend of ethics, a cohesive society and a sustainable
global economy where markets, labor and communities can perform well together.
Social investment- An aim towards contributing to physical infrastructure and accepting social
members as capital, such Social Capital progressively more seen as an indispensable part of
performing the businesses.
Transparency and trust- business has low ratings of trust in public perception. It is larger than
ever expectancy that companies shall be more open, more answerable and more ready to report
publicly on their performance in the social and environmental arena.
Increased public expectations- globally companies are anticipated to do more than merely
providing jobs and contribute to the economy through taxes and employment.”

With reference of the results of a global survey performed in 2002 by Ernst & Young, 94 percent
of companies asserted that developing a Corporate Social Responsibility (CSR) strategy can
deliver real business benefits. However, only 11 percent have made significant progress in
implementing the CSR practicing strategies in their organizations. Senior executives of 147
companies in a range of industry sectors across Europe, North America, and Australia
interviewed for the survey.

The survey indicated that CEOs are worsening to distinguish the advantages of executing the
Corporate Social Responsibility strategies, irrespective of increased pressure to include ethical,
social and environmental issues into their decision-making processes. The research found that
company CSR programs influence 70 percent of all consumer purchasing decisions, with many
investors and employees also persuaded in their choice of companies.

"Although companies recognize the value of an integrated CSR strategy, yet the majority are
failing to maximize the associated business opportunities" ByAndrew Grant, Ernst &Young’s
Environment and Sustainability Services Principle.

“Corporate Social Responsibility is now an integral deciding element among consumers'

and clients' choice that companies cannot afford to ignore. Firms who fail to maximize
their adoption of a CSR strategy would leave behind.”

The gratitude of the significance of CSR deeply ingrained in India

Respect is a much wanted after mark in the Indian corporate world and one of the reasons for the
vast reputation of “The Most Respected Companies of India survey”. It initiated by one of
India’s premier business magazines, Business World in 1983. The magazine admitted in a cover
feature following its first survey that the overpowering reader response towards the various
corporate houses is due to the work they do for the good cause to the community & society.
This urge, need & culture of CSR adaptability transcends into the corporate world. For decades
now, since Independence, corporate majors such as the Tata and Birla group of companies have
led the way in constructing corporate social responsibility an intrinsic part of their business
plans. These companies largely involved with social development initiatives among the
communities surrounding their facilities. The Jamshedpur city, also known as Tata Nagar in
northeastern Indian state of Bihar, stands out at a bonfire for other companies to follow.

Respect, as viewed by the survey was an aggregation of two wider aspects of a firm's
deliverables: quantitative aspects as profitability and qualitative aspects as the community
responsibility. The parameters for corporate respect in the survey are wide-ranging that involved
the Overall quality, the leadership of top management, depth of talent, belief in transparency,
ethics, social responsiveness, and environmental consciousness.

Criteria for ranking India’s most respected companies

Figure 1.8: Criteria for ranking India’s most respected companies

Source: Business world, January 2003 [India’s most respected companies]

Top Ten Most Respected Companies in India.

No.1 Infosys Technologies

No.2 Hindustan Lever

No.3 Reliance Industries

No.4 Wipro

No.5 ICICI Bank

No.6 Gujarat Co-operative Milk Marketing Federation

No.7 Dr. Reddy’s Laboratories

No.8HDFC

No.9 ITC

No.10 Hero Honda

What the survey results undoubtedly expresses is, that remarkable financials are not enough to
earn respect & trust (Brand equity). Organizations were respected not because these are gigantic
and dominant, but because these organizations remained transparent; their stakeholders trusted
the policies. Because their HR guidelines were fair & ethical, and especially these companies
contributed to society for a good cause. Out of all such determining factors or elements,
transparency and ethics were the most important.
 Areas of CSR addressed in Corporate Policies

Figure 1.9: Corporate Social Responsibility Survey 2002 – India (United Nations Development
Program, British Council, CII, PriceWaterHouseCoopers

Quite interestingly, the website Indian NGOs.com, a site projected to be a depository of

information related to the developmental sector, conducted personal interviews on social
responsibility among 196 Indian corporate, supplemented this with secondary research among
CSR policies of all the Fortune 500 companies. According to the findings of the study, in 58 per
cent of the corporate, the public relations department takes care of the liability for CSR
initiatives.
According to a study by financial research, The Economic Times, donations by listed companies
grew 8% during the fiscal ended March 2009. As many as 108 companies donated 20% more
than the previous years. The amount is even expected to grow up & up in the year 2014-2015.

Consumers steadily expect companies to make a broader & a healthier contribution to society.
Prior studies conclude that consumer’s purchase decisions positively influenced by socially
responsible initiatives. According to the research carried out by Cone Inc., in 2009, 79% of
consumers would like to switch to the brand associated with a good cause.

Bharat Petroleum and Maruti Udyog achieved the top ranking with 134 points each, whereas,
Tata Motors with (133) and Hero Honda with (131). The research based on a public goodwill
index, and India received 119 points in the index against a global average of 100. Thailand
achieved the top slot with 124 points.

Malini Mehra, founder, and CEO of Social Markets, an organization that works towards the
transition to sustainable development and realization of human rights and social justice, explains,
“There is the minimalist version, Corporate Social Responsibility is little more than a
philanthropic activity-tree planting, schools and health clinics. In the maximalist version,
Corporate Social Responsibility is related to the character and conduct, where integrity and
responsibility run right through every layer of the firm’s activities and ethos”.

External Relations Director Lee Bansil of Proctor and Gamble explains: “Co-donation and
cause-related marketing helps in promoting the competition, which in turn leads to corporate
innovation.” He believes this is essential for developing sustainable products and also for the
promotion of sustainable consumption.