Explain the relevance of CSR in contemporary society

Concept of Corporate Social Responsibility :

Ans.    Corporate Social Responsibility (CSR) is an expression used to describe company’s obligation to be sensitive to the needs of all the stakeholders in its business operations.

A corporate must commit to behave ethically towards its internal and external environment and contribute to improving the socio- economic fabric of society. What lies at the very core of corporate social responsibility is an ethical approach to business and it encompasses areas of concern about how a corporate serves the interest and r of the people at large. CSR is a company’s voluntary actions over and above its legal requirements with the aim of meeting the ethical needs of its employees, customers, society, locality and environment. It is the index of good corporate citizenship.

Relevance of CSR in contemporary society :

Social responsibility may sound like a moralistic term with little meaning for a pragmatic corporate; yet it is the bird word in corporate circles today. The corporation has been defined as a legal entity with unlimited life, limited liability and divisibility of ownership.

Thus, as a corporate citizen, every business must act in a responsive way. With corporates playing and increasingly important role in the affairs of the world, it is today imperative that they should become conscious and responsible for the consequences their activities and decisions have on society. Contemporary society expects that businesses operate within society, are dependent on society for getting their inputs as well as for marketing their goods and services. Therefore, in addition to providing goods and services, business needs to look after welfare of the various stakeholders.

1.      Survival and Growth : In recent times the concept of CSR has turn out to be a vital strategy for companies to survive in. A ruthless market environment. In today’s environment where markets shift and consumers preferences become even more unpredictable and complex, CSR can become a powerful tool for survival and growth.

2.      Enhanced Corporate Image and Reputation : CSR activities of a business are aim towards the welfare of society and this help develop a positive image for the firm. Enhanced Goodwill and Reputation will, on the one hand attract better employees to join such firms, and on the other hand attracts more customers- people do prefer to patronize a firm because of its positive image in society.

3.      Avoid government Regulation : If firms discharges their duties voluntarily and responsibly, much government regulations can be avoided. A lot of legislation has been enacted with respect to waste management, air and water pollution. If a firm is proactive and incorporates environment-friendly practices voluntarily, it can save itself from the forced implementation of strict government regulation, which sometimes may pose the business to close down.

4.      Change Consumer expectation : Today’s consumer have become more conscious about their rights and are also more demanding. They protest against supplier of harmful/inferior goods and services and other unethical practices of business.

5.      Moral Responsibility : Business is an integral part of society, dependent on it for getting its input as well as for marketing its goods and services. Therefore, business managers have a moral responsibility to protect the interests of society, and look after the welfare of their different stakeholders apart from providing goods and services.

6.      Huge Resources : Large organization have human talent and financial resources to solve societal problems, hence they should be socially responsive. They are also more efficient and ensure a business and result oriented approach towards social projects.

7.      Attracts better human resources : CSR is seen to be a great way to attract “good” talent and to retain them. Social initiatives are a good way to satisfy the emotional and social needs of employees by helping them contribute towards the good of society.