30-06-2012, 12:47 PM
Case study on Corporate Social Responsibility of MNC’s in India
Case study on Corporate Social Responsibility of MNCs in India - G Muruganantham .pdf (Size: 255.65 KB / Downloads: 103)
Abstract
In this era of global competition, declining brand differentiation, and increasing media clutter,
companies are going beyond the conventional marketing mix to increase the value of intangible
assets. Over the years there is a shift from functionally centric brands to emotionally centric -
brands to values - centric brands. Today, brands must be inspirational in a socially responsible
way to all stakeholders. To achieve the same Corporate Social Responsibility (CSR) has become
more common in business practices. CSR remains a very relevant strategic Marketing tool.
Many companies use CSR as a way to increase their image, generate brand equity, and increase
employee loyalty. The purpose of the paper is to understand the various CSR activities carried
down by select MNC’s in India and how are they integrating Corporate Social Responsibility
into their marketing strategy to build and sustain a competitive advantage.
Keywords
CSR; Marketing strategy; MNC’s in India; Brand Image; Competitive Advantage
Introduction
Corporate Social Responsibility (CSR) is defined as operating a business in a
manner that meets or exceeds the ethical, legal, commercial and public expectations that
society has of business. In the last twenty years, there has been a sea change in the
nature of the triangular relationship between companies, the state and the society
(Edenkamp, 2002). CSR has become increasingly prominent in the Indian corporate
scenario because organisations have realised that besides growing their businesses it is
also vital to build trustworthy and sustainable relationships with the community at
large. This is one of the key drivers of CSR programs (Ramya Sathish,). CSR is coming
out of the purview of ‘doing social good’ and is fast becoming a ‘business necessity’.
Corporate houses are realising that ‘what is good for workers - their community, health,
and environment is also good for the business ( Indu Jain, 2010).
MNC’s in India
Multinational companies are the organizations or enterprises that manage
production or offer services in more than one country. And India has been the home to
a number of Multinational companies. In fact, since the financial liberalization in 1991,
the number of multinational companies in India has increased noticeably (Raj Kumar,
2008). Globalisation and development of the new market economy in the last decade
have brought the global multinationals and investment houses to India for competing in
the domestic and international markets. As many as 90 percent of the Fortune 500
companies now have explicit CSR initiatives (Kotler and Lee 2004).
In a globalised world, the role of the state is diminishing and non-state actors,
including corporations, are undertaking many functions previously performed by the
state. There is no doubt that this has created a more open and liberal business
environment, promoted competition leading to a better quality of products and
services, improved the efficiency and effectiveness of the services offered and, indeed,
given rise to profits. But corporations have to make conscious efforts to become socially
responsible, recognising that the role and functions they perform inevitably have an
impact on society. Corporate social responsibility ensures that corporations promote
corporate citizenship as part of their culture. Corporate social responsibility is about
businesses transforming their role from merely selling products and services with a
view to making profits and increasing their revenue to the development of a society
through their abilities of generating capital and investing it for social empowerment.
CSR and Marketing
Today, branding has become the most important strategic differentiating activity
in a company's arsenal. In the future, a brand that can forge a durable psychological
bond between itself and all of its stakeholders / constituencies, its customers,
employees, suppliers and shareholders will represent the only real and sustainable
source of competitive advantage (Mythili Chandrasekar, 2006).
CSR plays a vital role in taking commercial brands out into the commercial
marketplace with a theme that is appealing to the sense and sensibility of the modern
consumer. CSR is therefore a valuable tool that marketers can use to market their brand
with equal panache and commercial effectiveness. The modern consumer understands
CSR that much more intimately. The future of marketing is full of CSR (Harish Bijoor,
2008). Marketers who ignore the responsibilities to other stake holders face the prospect
of a devalued corporate image and or legal reprisal. To meet the responsibilities
effectively organizations must address the concerns in the development of marketing
strategy (Robin, Donald & Reidenbach, 1987).
CSR at India
Several major CSR initiatives have been launched in India since the mid-1990s.
Nearly all leading corporates in India are involved in corporate social responsibility
programmes in areas like education, health, livelihood creation, skill development, and
empowerment of weaker sections of the society. Notable efforts have come from the
Tata Group, Infosys, Bharti Enterprises, ITC Welcome group, Indian Oil Corporation
among others. The 2010 list of Forbes Asia’s ‘48 Heroes of Philanthropy’ contains four
Indians. The 2009 list also featured four Indians. India has been named among the top
ten Asian countries paying increasing importance towards corporate social
responsibility disclosure norms.