Case study on Corporate Social Responsibility of MNC’sin IndiaDr. G. MurugananthamAssistant Professor, Management Studies, National Institute of Technology,Tiruchirappalli, India.AbstractIn 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 intangibleassets. 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 responsibleway to all stakeholders. To achieve the same Corporate Social Responsibility (CSR) has becomemore 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 increaseemployee loyalty. The purpose of the paper is to understand the various CSR activities carrieddown by select MNC’s in India and how are they integrating Corporate Social Responsibilityinto their marketing strategy to build and sustain a competitive advantage.KeywordsCSR; Marketing strategy; MNC’s in India; Brand Image; Competitive AdvantageIntroductionCorporate Social Responsibility (CSR) is defined as operating a business in amanner that meets or exceeds the ethical, legal, commercial and public expectations thatsociety has of business. In the last twenty years, there has been a sea change in thenature of the triangular relationship between companies, the state and the society(Edenkamp, 2002). CSR has become increasingly prominent in the Indian corporatescenario because organisations have realised that besides growing their businesses it isalso 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 comingout 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).Corporate social responsibility is a form of corporate self-regulation integratedinto a business model. Essentially, CSR is the deliberate inclusion of public interest intocorporate decision-making, and the honoring of a triple bottom line: people, planet,profit. A more common approach of CSR is philanthropy.International Trade & Academic Research Conference (ITARC) - London 2010Another approach to CSR is to incorporate the CSR strategy directly into thebusiness strategy of an organization. CSR may be based within the human resources,business development or public relations departments of an organization (Wood, 1991).Corporate Social Responsibility is what an organization does to influence the societypositively in which it exists. The concept of CSR has been evolving for decades. CSR is amultidimensional concept. While some take CSR as an obligation, others consider it asa strategic tool. CSR focuses on the social, environmental and financial success of thecompany. The increasing relevance of CSR in India has stemmed from the fact that abusiness cannot succeed by ignoring the human and social needs of our society.Corporations have emerged as one of the foundations of modern global society. Withthis increased power has come the demand by society for social accountability,commonly referred to as corporate social responsibility (Wilson, 2000). CSR is acompany’s activities and status related to its perceived societal or stakeholderobligations (Brown, 2001). The concept of CSR has become more and more common inbusiness practices and customers today almost expect companies to be sociallyresponsible.MNC’s in India

Multinational companies are the organizations or enterprises that manageproduction or offer services in more than one country. And India has been the home toa 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 decadehave brought the global multinationals and investment houses to India for competing inthe domestic and international markets. As many as 90 percent of the Fortune 500companies 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 thestate. There is no doubt that this has created a more open and liberal businessenvironment, promoted competition leading to a better quality of products andservices, improved the efficiency and effectiveness of the services offered and, indeed,given rise to profits. But corporations have to make conscious efforts to become sociallyresponsible, recognising that the role and functions they perform inevitably have animpact on society. Corporate social responsibility ensures that corporations promotecorporate citizenship as part of their culture. Corporate social responsibility is aboutbusinesses transforming their role from merely selling products and services with aview to making profits and increasing their revenue to the development of a societythrough their abilities of generating capital and investing it for social empowerment.MNCs are working hard to create their identities, reputations and the goodwillassociated with being a good corporate citizen into their marketing initiatives in effortsto garner sustainable competitive advantages.International Trade & Academic Research Conference (ITARC) - London 2010India has got a huge market potential, Labor competitiveness, Macro-economic stability.

It has also got one of the fastest growing economies in the world. Besides, the policy ofthe government towards Foreign Direct Investment has also played a major role inattracting the multinational companies in India.Review of LiteratureCSR used to be a formality. A function run in the organization for the sake of it.Rather than with aim of creating any material difference to the society. Now, howeverthe scenario has changed. Due to more product categories, competition in the marketand lack of differentiation, companies are integrating CSR with marketing plan.Companies realise that to gain customer loyalty, to make the consumer choose themamong a host of competing products, it is imperative to go with trend and project adistinct brand/corporate image, which is of being socially responsible corporatecitizen. Due to that marketers are jumping the CSR brandwagon and branding theirproducts and services tagged with CSR (Krish 2010).Adam Lindgreen, et al (2009), observed that CSR practices are more prevalent inorganizations that employ relational marketing practices. All types of CSR practicesreceive positive influences by one or more types of relational marketing practices. In theprocess of building and engaging in relationships, networks, and interactions withcustomers and other stakeholders, managers look for CSR practices that can generatetrust, loyalty and support from stakeholders, especially as product differentiationbecomes increasingly difficult.A survey was conducted by ORG-MARG for TERI-Europe in several cities ofIndia in 2001 to capture perceptions and expectations of CSR reveals that a majority ofthe general public feels that companies should be held fully responsible for roles overwhich they have direct control. These include providing good products and cheaperprices, ensuring that operations are environment friendly, treating employees fairly

without any discrimination based on gender, race or religion and applying labourstandards globally. Moreover general public felt that the companies should also be heldresponsible for bridging the gap between the rich and the poor, reducing human rightsabuses, solving social problems and increasing economic stability.A firm’s CSR initiative affected both stakeholders’ overall beliefs and attitudestoward the firm as well as their intentions to seek employment with the firm, consumeits products, and buy its stock. Individuals who were aware of the CSR initiative hadmore positive company-related associations, displayed greater organizationalidentification with the company and indicated a greater intent to purchase products,seek employment, and invest in the company than respondents who were unaware ofthe initiative. Therefore, CSR activity has the potential to increase not only CSRInternational Trade & Academic Research Conference (ITARC) - London 2010associations, attitudes, and identification but also the intent of stakeholders to commitpersonal resources (e.g., money, labor, etc.) to the benefit of the company.A key implication, therefore, is that to reap the positive benefits of CSR,companies need to work harder at raising awareness levels (Sankar Sen, Bhattacharyaand Daniel Korschun, 2006). Reactions of consumers to CSR reveals its companyfavoringeffects on an array of cognitive and affective (e.g., beliefs, attitudes,attributions, identification) as well as behavioral (e.g., loyalty, even during productharmcrises) outcomes. Consumers’ ability to accurately identify the CSR activities ofthe firms they consume from is, in general, quite low. Awareness of the CSR initiativeto be associated with a set of four company specific outcomes - beliefs, attributions,attitude, and identification - that are internal (i.e., pertaining to thoughts and feelings)to consumers (Bhattacharya and Sen, 2003).Venu Srinivasan (2007) highlighted that Corporate Social Responsibility is morethan philanthropy and must not mean ‘giving and receiving’. An effective CSR

initiative must engage the less privileged on a partnership basis. “CSR meanssustainable development of the community by being partners in their progress. Thegovernment has been evolving a large number of welfare schemes for the people butexperience shows that in most cases the benefits do not reach the most deserving.Industries have expertise in man management, financial management and businessplanning. They can easily provide the missing ingredients of leadership andorganization and establish the ‘last mile connectivity’ to reach the benefits to thedeserving people. Therefore the focus of CSR could be ‘unlocking’ the last mileconnectivity. Industry must be a catalyst for social development. They must providethe leadership, know-how, training, etc.Angshuman Paul (2007), pointed out that CSR does not promote a brand and itseffect can never be visible in the profit & loss account of a company. CSR plays a role inoverall corporate objectives, as a better society means greater future market potential.Krishna (1992) examined the attitudes of managers of large-scale enterprises towardsCSR implementation in India. Majority of the managers opined that there is a valuechange in the society and industry has a dominant role in shaping the society into asocialistic society. There is a rise in public demand for socially responsible behavior byindustry and social action programs create a favorable public image, it is in the longruninterest of the company to get directly involved in social issues, industry hasnecessary resources and talent to engage in social action programs.Confederation of Indian Industry (2002) conducted a survey jointly with UNDP,The British Council and PricewaterhouseCoopers (PwC) to ascertain the predominantperceptions on CSR in India and the role that companies define for themselves in thesociety. The results shows that the desire to be a good corporate citizen and improvedbrand image are the main drivers of CSR among companies.International Trade & Academic Research Conference (ITARC) - London 2010

Ilan Alon etal (2010) analysed the status of corporate social responsibilitycommunications in Brazil, Russia, India, and China (BRIC) nations. The four countriesare among the biggest emerging markets, forecasted to have increasing influence ineconomic and political spheres.The results of the analysis show that CSR activities differ among BRIC nationswith respect to CSR motives, processes, and stakeholder issues. China seems to be leastcommunicative on a number of CSR issues. Even though India's GDP per capita islower than that of China, its communication of CSR is more intensive. This suggeststhat economic development alone cannot fully explain the differences in CSRcommunication.The role of business in society has undergone several changes. Awareness of theimpact of business on society and environment has grown along with the increasingsocio-regulatory pressures. It is no longer simple enough to employ people, makeprofits and pay taxes. Companies are now expected to be responsible, accountable andbenefit the society as a whole (Brown, 2001). Business cannot escape from society andsociety cannot exist without business (Davis and Frederick, 1985). Thus, there is a twowayrelationship between business and society, Cannon (1994) holds the view thatbusiness is expected to create wealth, supply market, generate employment, innovateand produce a sufficient surplus to sustain its activities and improve its competitivenesswhile contributing to the maintenance of community in which it operates.The importance of all forms of global corporate social responsibility (CSR) isevident with the increasingly widespread adoption of ISO9000 and ISO14000management systems by global corporations. As more consumers demand thatmarketers follow socially responsible practices, corporations are given an opportunityto further exploit the newer, verifiable social accountability system, SA8000, to enhancetheir reputation, differentiate their products, and build competitive advantage.

Governments, consumer groups, and social organizations worldwide are demandingincreased social accountability by multinationals. SA8000 may emerge as theinternational social accountability standard. The adoption of SA8000 may be perceivedas a very rational, cost effective, and strategic approach to managing the corporation'ssocial reputation with its stakeholders. Consumers consider switching to anothercompany's products and services, speak out against the company to family/friends,refuse to invest in that company's stock, refuse to work at the company and boycott thecompany's products and services in case of negative corporate citizenship behaviours(Edenkamp, 2002).Brigitte Planken, Subrat Sahu and Catherine Nickerson (2010) investigatedcorporate social responsibility platforms and the communication surrounding thoseplatforms in India. Indian consumers may not value philanthropic CSR as highly asother CSR initiatives and that this may in turn influence their attitudes to differentmarketing communication strategies. They also suggested that Indian corporationsInternational Trade & Academic Research Conference (ITARC) - London 2010must formulate the form and content of their CSR policies in the future within amarketing strategy in order to influence their stakeholders positively and increase theircompetitive advantage.CSR and MarketingToday, branding has become the most important strategic differentiating activityin a company's arsenal. In the future, a brand that can forge a durable psychologicalbond between itself and all of its stakeholders / constituencies, its customers,employees, suppliers and shareholders will represent the only real and sustainablesource of competitive advantage (Mythili Chandrasekar, 2006).CSR plays a vital role in taking commercial brands out into the commercialmarketplace with a theme that is appealing to the sense and sensibility of the modernconsumer. CSR is therefore a valuable tool that marketers can use to market their brand

with equal panache and commercial effectiveness. The modern consumer understandsCSR 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 prospectof a devalued corporate image and or legal reprisal. To meet the responsibilitieseffectively organizations must address the concerns in the development of marketingstrategy (Robin, Donald & Reidenbach, 1987).CSR has an important role to play especially in building up trust in the minds ofthe consumers. In an emerging market where consumers are looking for functionalproducts which last longer and accelerated obsolescence is not a problem like indeveloped markets, the consumer perception about the company brand assumessignificance. A company which builds the image of producing quality products that lastlonger though they may not be on the cutting edge of technology will actually be able togain strategic advantage in emerging economies. Firms all over the world are beginningto grasp the importance of intangible assets, be it brand name or employee morale. Onlyfirms that have gained the goodwill of the general public and are ideal corporatecitizens will be to develop these intangible assets into strategic advantages (Edenkamp,2002).Companies are beginning to realise the fact that in order to gain strategicinitiative and to ensure continued existence, business practises may have to be mouldedfrom the normal practise of solely focusing on profits to factor in public goodwill andresponsible business etiquettes (Raynard and Forstater, 2002). Corporate socialresponsibility is arguably the most important thing on any brand marketer's mind. It'simportant because studies increasingly show that consumers will spend their money onbrands that reflect their values and concerns (Mark Choueke, 2009). It’s such a shame to

see companies doing great CSR work then failing to use it to boost brand reputationand sales. In today’s world, mainstream consumers look out forInternational Trade & Academic Research Conference (ITARC) - London 2010ethical/sustainable/responsible brands. The fact is that in today’s society all businessfunctions must understand social and environmental impacts and work towardsreducing or improving them. Unfortunately, marketing (unlike sourcing,manufacturing, logistics, legal and many other functions) has been very slow on theuptake.Companies such as Marks & Spencer have already started to improve the linksbetween marketing and CSR, with impressive results. According to M&S’s CSR chief,Mike Barry, “Look Behind the Label” has been their most successful consumercommunications campaign ever (Diana Verde Nieto, 2006). CSR practically has thesame effects as advertisements, because it sheds a positive light on a brand or product.That is why CSR can also be seen as an expression of marketing. By including the brandname in social responsible campaigns, brand awareness and brand recognition areraised. It's clear that the concepts of value and values are rapidly merging in the mindsof consumers. People want to be engaged with companies that share their values (ScottBeaudoin, 2009). As corporations pursue growth through globalization, they haveencountered new challenges that impose limits to their growth and potential profits.while some companies use CSR methodologies as a strategic tactic to gain publicsupport for their presence in global markets, helping them sustain a competitiveadvantage by using their social contributions to provide a subconscious level ofadvertising (Fry, Keim & Meiners, 1986).CSR has shifted decisively from the realm of `nice to do' to the realm of `need todo' not just because it is a serious and sustained interest of consumers but also because

opinion leaders recognise the fact and will act accordingly. The notion of consumerslooking behind the label to see the company is becoming more widespread and peoplewant to work for corporations they feel good about. Given that CSR can appeal toanyone from consumers and employees to the government and NGOs, it is easy to seewhy corporations are striving to become socially responsible (Robert Gray, 2001). In1970, Milton Friedman of New York Times rightly wrote: “ the social responsibility ofbusiness is to increase profits.” The concept of CRM is a very effective tool for earning aprofit while at the same time being socially responsible. This is in essence whatmarketing is all about and by using CSR in the form of CRM companies also involve thecustomers in the process (Rickard, Richard Backteman & Temuulen Batmunkh, 2009).As world changes, so do consumer attitudes and expectations of brands. Whilemany large companies have adopted corporate responsibility to improve businesspractices, consumers are asking more. As global competition for hearts, minds, andwallets intensifies, it will no longer be a question of whether a business should practiceresponsible consumerism. This will be expected and demanded -while becominganother point-of-entry hygiene factor. What will increasingly differentiate brands arethe quality and sustainability of this responsible consumerism. Brands whoseInternational Trade & Academic Research Conference (ITARC) - London 2010organizational purpose, vision, and values are driven by this are set to flourish (MelissaDavis, 2006).Companies and their brands are key players on the global stage, and individualshave the power to effect change through their buying choices. The benefit of a brandusing its marketing power to contribute responsibly can surely outweigh the cynicismor option of doing nothing at all. For example, when a customer buys a Motorola Red

phone, the company donates £10 (US$ 18.58) to the Global Fund, while 5 percent ofevery bill is donated by the phone carrier. As Motorola's Dale says: "Motorola doesn'tjust want to be a great company, but a good company. It's not about the coolness ofcause-related marketing, it's about wanting to make a difference.An increasing number of corporations are realizing the benefits that can bederived from cause-related marketing (CRM) and are therefore adopting it as amarketing tool to achieve their marketing objectives, by demonstrating a commitmentto improving the quality of life in the communities in which they operate. consumersexpect corporations to be actively involved in activities of CSR.McWilliams and Siegel (2001) proposed that consumers tend to "demand" CSR-relatedproduct attributes for product differentiation (such as social and environmentallyresponsible sourcing and manufacturing) when consumer income increases. Firmsusing CSR behavior to maximize profits, the use of CSR behavior as a mechanism bywhich to build reputation and enhance competitive advantage is well accepted (Milesand Covin, 2000).Investments in corporate social responsibility are believed to create value notonly for stakeholders of the corporation, but also for a corporation itself. One possibleway in which this value for the corporation can be created is through the marketing ofcorporate responsibility (Bert van de Ven, 2008). Marketing tools and techniques canalso be used in projects to promote good causes in a more effective way (Kotler and Lee,2005).In today’s competitive market environment, corporate social responsibilityrepresents a high profile notion that has strategic importance to many companies.Importantly, along with increasing media coverage of CSR issue, companies themselvesare also taking direct and visible steps to communicate their CSR initiatives to variousstakeholders including consumers. CSR contributes positively to firms market value.

Managers can obtain competitive advantages and reap more financial benefits byinvesting in CSR. Companies should realize that CSR initiatives can represent a robustpublic relations strategy, particularly in the current market environment in whichstakeholders such as customers, may have strong social concerns (Xueming Luo,Bhattacharya, 2006).International Trade & Academic Research Conference (ITARC) - London 2010CSR is reported to affect, either directly or indirectly, consumer productresponses, customer-comapny identification, customer donations to nonprofitorganisations and more recently customers product attitude (Brown 2001).The brand building process is gradual, sustained one that needs a lot of investment bothfinancial as well as intellectual. For a company to be recognized and respected as aresponsible brand of the modern day world, the entire business model has to be madesustainable one that ensures that it is not exploiting any of its stakeholders (AmitBapna, 2007).In crowded marketplaces, companies strive for a unique selling proposition thatcan separate them from the competition in the minds of consumers. CSR can play a rolein building customer loyalty based on distinctive ethical values. Act as a branddifferentiator. If companies do not inform consumers properly about the CSRinitiatives they take, they will not reap the benefits of their investments in CSR.Corporate credibility, corporate positioning, and purchase intentions are all enhancedwhen the initiatives are proactive towards society (Becker-Olsen et al., 2006). Formarketing of CSR corporates can use strategy of reputation protection andimprovement, the strategy of building a virtuous corporate brand and ethical productdifferentiation (Bert van de Ven, 2008)CSR at IndiaSeveral 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, andempowerment of weaker sections of the society. Notable efforts have come from theTata Group, Infosys, Bharti Enterprises, ITC Welcome group, Indian Oil Corporationamong others. The 2010 list of Forbes Asia’s ‘48 Heroes of Philanthropy’ contains fourIndians. The 2009 list also featured four Indians. India has been named among the topten Asian countries paying increasing importance towards corporate socialresponsibility disclosure norms.Tata Group an India-based indigenous multinational enterprise with a unique140-year old commitment to the community is the pioneer in India for CSR activities.Despite the 2008-2009 global recession, the Tata Group topped the economic valuecreation charts. In 2008-2009, the Group had grossed US$70.8 billion in revenues. 64.7per cent of the Groups revenues were now coming from outside India. It exploresvalue-creation, leadership, ethics and sustainable development on the backdrop ofrapid internationalizations and shifting stakeholders' expectations for corporate socialresponsibility (Oana Branzei, 2010) .Although corporate India is involved in CSR activities, the central government isworking on a framework like CSR Credits for quantifying the CSR initiatives ofInternational Trade & Academic Research Conference (ITARC) - London 2010companies to promote them further. Moreover, in 2009, the government made itmandatory for all public sector oil companies to spend 2 per cent of their net profits oncorporate social responsibility.Today, CSR in India has gone beyond merely charity and donations, and isapproached in a more organized fashion. It has become an integral part of the corporatestrategy. Companies have CSR teams that devise specific policies, strategies and goalsfor their CSR programs and set aside budgets to support them. For example,organizations like Bharath Petroleum Corporation Limited, Maruti Suzuki IndiaLimited, and Hindustan Unilever Limited, adopt villages where they focus on holistic

development. They provide better medical and sanitation facilities, build schools andhouses, and help the villagers become self-reliant by teaching them vocational andbusiness skills.CSR has come a long way in India. From responsive activities to sustainableinitiatives, corporates have clearly exhibited their ability to make a significant differencein the society and improve the overall quality of life. Corporates have the expertise,strategic thinking, manpower and money to facilitate extensive social change. Effectivepartnerships between corporates, NGOs and the government will place India’s socialdevelopment on a faster track ( Ramya Sathish,2010).CSR at IntelMarketing is only Marketing when it's sustainable. Intel has always worked onthe premise that CSR Marketing without CSR substance is not marketing at all. It’s plainwrong. But when there is real substance - real activity and achievements - then there is areal marketing story to tell. One that communicates reliability and strengthens thebrand. This makes corporate responsibility coupled with clever marketing and clearcommunications a winning formula. Intel managed to build a synergy betweengrowing its business and spreading computer education amongst communities in India.Intel uses its CSR programme to spread computer usage ans scientific temper amongthe larger population in the countries it has a presence in. For the spread of computereducation alone, the company spends as much as $100 million every year.One of Intel’s key programmes, called “Intel - Teach to the future”, targetsteachers in schools, colleges and teacher training institutes to make them adept athandling technology in the classroom and importing digital learning to futuregenerations (Preeti Mehra, 2004). Corporate responsibility for Intel is also aboutinnovation since it apply resources to address global challenges.CSR at MicrosoftMicrosoft has been right in the forefront when it comes to programmes that

address the semi-urban, rural, non-English speaking people in the country. And not justInternational Trade & Academic Research Conference (ITARC) - London 2010as a charity provider. Apart from the grants that Microsoft has made, to the tune ofmore than $1.15 million in the country, Microsoft is frequently coming up with softwarethat addresses the needs of this section. Recently, as part of its efforts at bringing anaffordable local language computing solution for India the company launched itsWindows XP starter edition exclusively developed for India (Kripa Raman 2006).CSR at HULHindustan Unilever is involved in number of CSR initiatives in India. The mainobjective of Project Shakti of Unilever is creating rural entrepreneurs. It trained 13,000underprivileged Indian women distribute the company’s products to 70 million ruralconsumers. The company is working with women’s self-help groups to teach sellingand book-keeping skills and build commercial knowledge. The women who participatein this programme are, by and large, able to double their household income. Shakti hasalso allowed Unilever to increase its reach to 30% more of India’s rural population sinceits inception in 2000. The company is joined in its efforts by some 300 groups, NGOs,banks and various government entities allowing it to take part in strategic publicprivatepartnerships (Joseph Vackayil, 2007).CSR at Coca-colaCoca-cola India worked hard towards water conservation and communitydevelopment has been given Golden Peacock Global award 2008 for CSR. The awardhas been conferred to Coca-Cola India for its efforts in water conservation andmanagement and community development initiatives. The soft drink major now has320 rain water harvesting implements across 17 states in India, and it has also beensuccessful in restoring water conservation programme. Side by side, the company isrunning the ‘Elixir of Life’ project that provides drinking water to 30,000 children in 100

primary and panchayat schools in around Chennai. Coca-Cola India undertakes adiverse range of activities for the benefit of the community across the country (DeepakKaul, 2007).CSR at AmwayAmway is one of the world’s largest direct sales organisations with over 3million Independent. Business Owners (IBOs) in over 80 markets and territoriesworldwide. It is a family-owned. business with a strong emphasis on family values.Many of these are raising families. They therefore have a strong bond with children.These families are more than happy to partner with Amway, who, as part of itsCorporate Social Responsibility strategy, works with UNICEF, the United NationsChildren’s Fund. As a family company, Amway is committed to playing a part inimproving the lives of children in need across the globe. In this way, the company isable to show its commitment to the support of global causes. Amway defines a globalcause as ‘a social issue affecting many people around the world engaged in a struggle orplight that warrants a charitable response’. Amway’s vision is to help people live betterInternational Trade & Academic Research Conference (ITARC) - London 2010lives. It does this every day by providing a low-cost low-risk business opportunitybased on selling quality products.CSR at CanonSuccessful global businesses have the power to make a real difference. Economicperformance and social responsibility can go hand in hand, when there is a genuineconsideration to make an impact on the communities and the environment. True globalcompanies must foster good relations with customers, communities in which theyoperate, nation and bear the responsibility of the impact their activities have onenvironment and society. Corporate Social Responsibility at Canon is a true effort toinfluence society in a manner that earns the trust and respect of stakeholders and

society. This belief in positive behavior has been embedded in the way canon work fordecades since introduction of its corporate philosophy of Kyosei. A concise definitionof Kyosei is "Living and working together for the common good". According to Canon,All people, regardless of race, religion or culture, harmoniously living and workingtogether into the future.CSR seems to be a mandatory practice adopted by almost all companies but atGE India, CSR being handled in a different way. GE had adopted an NGO called Vidyawhich has been educating underprivileged children for the past 18 years at New Delhi.GE’s association with Vidya began when 15 employees of GE India started mentoringschool children and helping them in clearing their 10th and 12th standard examinations(Aabhas Sharma, 2006).GlaxoSmithKline Pharmaceuticals’ CSR programs primarily focus on health andhealthy living. They work in tribal villages where they provide medical check-up andtreatment, health camps and health awareness programs. They also provide money,medicines and equipment to non-profit organizations that work towards improvinghealth and education in under-served communities. SAP India in partnership withHope Foundation, an NGO that works for the betterment of the poor and the needythroughout India, has been working on short and long-term rebuilding initiatives forthe tsunami victims. Together, they also started The SAP Labs Center of HOPE inBangalore, a home for street children, where they provide food, clothing, shelter,medical care and education. (Ramya Sathish, 2010). Pepsico plans to widen its productits portfolio in India and build the brand’s image around corporate socialResponsibility. Nike managed CSR as a core part of business (Simon Zadek ,2004).Benefits of CSRA new era of social consciousness is evolving throughout the world. Over the

last 20 years, we have shifted from functionally centric brands to emotionally centricbrandsto values-centric brands. Today, brands must be inspirational in a sociallyresponsible way. It is no longer enough for brands to define themselves in terms ofInternational Trade & Academic Research Conference (ITARC) - London 2010what they are: they must make a statement—environmentally, culturally, and socially—about what they want to be. A key advantage of these corporate initiatives is that unlikein the traditional brand-marketing domain, a firm’s intangible assets, when strategicallydeployed, can be marketed not just to its customers but to other stakeholders as well.Clearly, measures of intangible assets and their dependencies are growing moreimportant. Many companies use CSR as a way to burnish their image, generate brandequity, and increase employee loyalty. In this era of global competition, declining branddifferentiation, and increasing media clutter, companies are going beyond theconventional marketing mix to incorporate corporate-level intangible assets such astheir identities and reputations and the goodwill associated with being a goodcorporate citizen into their marketing initiatives in efforts to gain sustainablecompetitive advantages.Companies have been encouraged to adopt and expand CSR efforts as a result ofpressures from customers, employees, communities, investors, activist organizationsand other stakeholders. As a result CSR has grown dramatically in recent years.Companies have experienced a range of bottom line benefits from being engaged inCSR which include improved financial performance, reduced operating costs andincreased sales and customer loyalty A number of studies conducted in past arrived atpositive association between CSR and financial performance (Ruf et al, 2001).A company considered socially responsible can get benefit both by its enhancedreputation with the public as well as its reputation within the business community.

Social action programs create favorable public image (Rashid and Ibrahim, 2002).Hindustan Unilever Ltd. (HUL) through its Surf Excel brand gained immeasurablereputation in the course of its campaign of education to poor children. In a surveyconducted by Confederation of Indian Industry (2002), majority of the corporaterespondents had the perception that CSR leads to improved brand image.Companies going for CSR find it comparatively easy to recruit and retain theskilled employees for a sufficient long period of time which are vital for the success ofbusiness (Krishna, 1992). This is empirically tested and proved by Turban and Greening(1996) that corporate social responsibility is positively related to a firm's attractivenessas an employer. In a subsequent study by Luce et al (2001), it was evidenced thatcorporate social performance is positively related to a firm's familiarity which in turnaffects organizational attractiveness as an employer. Consumers expect firms to conductbusiness ethically, and they also showed their willingness to reward ethical behaviorand punish the unethical behavior of firms through their purchase behavior. Customersprefer to purchase from the companies which are conscious about CSR.Companies are changing the way they market their corporate socialresponsibility (CSR) initiatives – more and more of them are becoming increasinglyInternational Trade & Academic Research Conference (ITARC) - London 2010transparent about their supply chains and are fostering dialogue with their customers.Companies such as Nike and Hewlett-Packard have led the way by making informationavailable online regarding their supply chains. Openness builds trust and trusttranslates into transactions (Grace Segran, 2010). Corporations often willingly engage insocially responsible behaviour precisely because it enhances shareholder value.Moreover management believes such activities create goodwill among customers inexcess of their price tag (Roger Martin, 2002).Today companies with the help of CSR reaping the benefits that are proactively

and strategically building their "Social Brand Capital". Social Brand Capital (SBC) isthe loyalty value that stakeholders attribute to a company's brand as a result of thecompany's commitment to social/environmental causes. As Michael Porter and MarkKramer recently stated, "adding a social dimension to your value proposition offers anew frontier in competitive positioning." GE and FedEx are great examples ofcompanies in this stage of building their SBC. FedEx is introducing a low-emissionhybrid electric powered delivery vehicle that could become the standard medium dutydelivery truck in FedEx's fleet. GE's "ecoimagination" project is infusing US$1.5 billioninto developing ecologically responsible innovation that will reduce greenhouseemissions (Rachel Simmons, 2010).CSR helps in increased market share and new market penetration and also helpsunderstand and transform public perception of a company and industry. In factcompanies can successfully make a business case for improving profitability throughhigher market share and increased customer loyalty if they can demonstrate their CSRpractices as unique differentiator (Balasubramanian, 2007). CSR is considered to be animportant aspect of business success through efficient resource management,environment protection, employment, eco-friendly atmosphere, etc.ConclusionThe concept of CSR has become more and more common in business practicesand customers today almost expect companies to be socially responsible. Even thoughCSR is very important for companies, it has historically not been a very lucrativeapproach for them to involve in these activities. The business of the 21-st century willhave no choice but to implement CSR. Like any successful management strategy, a CSRprocess needs both high level management vision and support, and buy-in at all levelsof the company. CSR does not give immediate results. The same CSR initiative will also

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