Corporate public responsibility in India - An Empirical study

Free Non Profit Bylaws Template - Corporate public responsibility in India - An Empirical study

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Introduction:

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India has come to be one of fast growing economies of the world. It is growing at the rate of 9 per cent p.a. As an emerging market all are looking at India from an international perspective. At the stage when India is set to derive a global position, it is important to gauge either the economic growth is due to flourishing firm operations. Organizations must comprehend that government alone will not be able to get success in its effort to uplift the downtrodden of society. The gift societal marketing thought of associates is constantly evolving and has given rise to a new concept-Corporate social Responsibility. Many of the prominent corporations over the world had realized the point of being linked with socially relevant causes as a means of promoting their brands. Cause-related marketing and corporate social accountability has in case,granted associates with a new tool to compete in the market. Csr refers to the corporation's obligation to all the stakeholders. It stems from the desire to do good and get self delight in return as well as societal obligation of business. This could be a strategic marketing activity a way for a firm to do well by doing good-distinct from sales promotion, corporate philanthropy, corporate sponsorship, corporate Samaritan acts and social relations. Now, it is assumed to be accountability of the firm houses too.

Nothing builds brand loyalty among today's increasingly hard to please consumers, like a company's proven commitment to a worthy cause. Other things being equal many consumers would do firm with a firm that stands for something beyond profits. In nutshell, Csr and cause linked marketing results in increased sales, visibility, and buyer loyalty and enhanced firm image along with confident media coverage.

Rural India has a habitancy of 700 million habitancy spread over 6,38,000 villages. Thus more than 60 per cent of India's total habitancy is rural by nature. A article by National Council of Applied Economic explore (Ncaer) shows that rural consumers contain more than 50% of consumers and are a prime market for buyer goods and important services. Culture is the pillar of our country and if the pillar has strength, then it can raise our country to a top level. Organizations are helping to reserve as well as revive the rich culture of the country straight through their programs. Today, India's literacy rate stands colse to 65 per cent, up from 52 per cent in 1991. (Nsso Survey) considering the rate of increase, it would take some 20 to 25 years to clear this problem. Hence, the Csr agenda of corporate consider rural development as one of the prominent dimension.

On the other hand, a nonprofit society is an organization, which exists for providing some advantage or aid or a sort of self-help group. Like the name suggests, the society will have all the properties of a profit-making organization, i.e. A mission statement, a vision, offices, infrastructure etc., but the objective will not contain manufacture a profit out of its operations. However, to run any organization, funds are needed, and this has to come in to the non-profit in terms of financial i.e. Grants, subsidies, donations etc or services in terms of staff reserve or infrastructure support.. The sources for these funds could be individuals, the government or other charitable institutions and ultimately companies. These firm houses straight through their Csr (Corporate social Responsibility) initiatives contribute to the mission of social strengthen and growth of India.

Defining Corporate social responsibility

Definitional issues regarding "corporate social responsibility" (Csr) have been debated since many years. Early Csr models was initiated in the early 1960s.It showed the "social" aspect of Csr as referring directly to those responsibilities above and beyond economic and legal obligations (Carroll, 1979; Waddock, 2004; Matten and Crane, 2005). Many carefully corporate social accountability synonymous with voluntary and philanthropic acts by firm organizations which are designed to alleviate social ills or in order to advantage a disadvantaged group chosen by the corporation's managers.

The World firm Council for Sustainable development in its publication "Making Good firm Sense" by Lord Holme and Richard Watts, used the following definition. "Corporate social accountability is the continuing commitment by firm to behave ethically and contribute to economic development while enhancing the capability of life of the workforce and their families as well as of the local community and community at large"

"Csr is about capacity construction for sustainable livelihoods. It respects cultural differences and finds the firm opportunities in construction the skills of employees, the community and the government" "Csr is about firm giving back to society.

Traditionally, Csr has been defined much more in terms of a philanthropic model. associates make profits, unhindered except by fulfilling their duty to pay taxes. Then they donate a confident share of the profits to charitable causes. It is seen as tainting the act for the firm to receive any advantage from the giving.

According to Philip Kotler, "Corporate social Responsibility: Doing the Most Good for your firm and Cause" does a frightful job of describing the range of corporate social initiatives and suggests best practices for choosing, implementing and evaluating them.

Thus, corporate social accountability has been a topic that has received a lot of attention in recent years (Sethi, 1995).

Need for study:

The basic aim of the study is to gain familiarity or formulating a question or to perform new insights into it. In this singular study, an effort has been made to comprehend and gain comprehension into behavior or attitude of associates towards various aspects of social contribution. This study deals with the behavior of the corporates. It tries to recognize complex behavior and set patterns in it. The gift study relates to the attitude of 50 associates in India so as to predict the behavior.
Why will any firm give funds or services to a non-profit? The government will furnish for funds and or services as it is responsible for the social welfare of the people. Similarly a charitable custom will do the same as it is their objective to help the social cause. An private may donate to a nonprofit due to reasons of philanthropy, or in memory of some man etc, but why does a commercial society contribute for a social cause? The basic objective of a commercial society is to make profits. Why will it divert vast funds to a nonprofit if there is no return on that investment?

Objective of the study:

The objective of the study was to try and understand why an society contributes to a social cause and what it expects to gain in the process. Is it philanthropy, is it a feeling of obligation to the community in normal or is it for financial benefits in terms of tax exemptions, etc.

Research institute process:

To understand the guess why an society contributes to a social cause, it was important to get an comprehension into the organizations' view of the business, its views , its policies , the reasons why it contributes and its objectives and relationships with all its stakeholders i.e. Employees, customers, suppliers, shareholders and society. The questionnaire was designed accordingly to get the relevant data from the respondents.

In this study the researchers have adopted convenience sampling. habitancy of study includes associates placed in India.

Sources of Data Collection:

The explore consists of the application of both customary and secondary data. customary data was collected by administering questionnaire.

The secondary data was collected straight through websites and from various journals and magazines. Reasons for gift to Csr by organizations were a sensitive issue. Hence the researchers had to gain the confidence of the supervision otherwise a study of this nature was impossible.

The questionnaire was administered to various companies. Anonymity of responses was promised. While it was sent to about 70 companies, only 50 associates responded. The responses were obtained straight through the human resource departments of the firm or indirectly straight through the implicated group or legal handling the area. The questionnaire was coded into Spss and then the data from the questionnaire entered into the database. While frequency and cross tabulations were used for most of the data analysis, factorization was used to group attributes, which were prominent reasons for contributing to a social cause.

The prognosis and Findings:

Views towards business: 82.4% of the associates seem to strongly agree that firm means maximizing benefits, manufacture money and doing your work well. No firm disagrees on this point. 17.6% more agree than disagree to the same. 76.5% says that firm is manufacture money. 88.2% strongly agree as well as agree that it is all about social accountability while 17.8% more disagree than agree.

Place for ethics in business: 88.3% believe that there is place for ethics in business. However, a small majority, 11.8% strongly feel that there is no place for ethics in business.

Business & Economic attitude: 82.3% believe that firm needs only an economic attitude while 17.7% respondents felt that firm does not need an economic attitude, balance feel it is needed.

Social policies: 70.6% of the corporates join together to the community straight through social activities, and 23.5 % straight through specific Ngo. Only half (52.9%) have a clear-cut procedure on social development. 64.7% feel that their social accountability is towards both the community and their employees. 29.4% feel that their social accountability is only towards their employees. 35.3% have not adopted any settlement or social organization. The participation of the firm in various activities is mixed, with no clear-cut trend emerging.

Donations: 70.6% feel that giving a donation will not growth the image of the company. However, 29.4% give donation to advantage from tax.

However, cross tabulation of these two parameters revealed that only 71.4% respondents who said that donations do not improve its image while 28.6% respondents say that giving donations improves image building. About 50% contribute to a social cause, spend as a long-term investment. 70% responded that they do not donate for tax.

Credo of the organization:

Principal Component Factor prognosis methodology was used with varimax formula to recognize the relevant factors which has been consistently identified as customary by the respondents. The rotated component matrix was used, as it would be easier to settle which variables are loaded on which factor.

Factor prognosis shows that 4 main factors used by organizations as their credo. The first factor 1 as firm value: internal stakeholders which contain humane approach, employee and customer satisfaction, capability of life.

Factor 2: profit Maximization, which contain team work and profit maximization.

Factor 3: social Responsibility, which combines with hard working behavior.

Factor 4: Ethical Practices

Csr: Objectives and Relationships with stakeholders:

Customers: 47.1% have their objectives towards the customer as satisfying them by providing quality, and within this, 50% term their relationship as friendly. an additional one 29.4% objective is to give good value and satisfactory service.

Shareholders: 41.2% objectives are more towards good returns and 35.3% express the real photo of the company, while 23.5% assure profit to its shareholders.

Employees: 64.7% feel that their objective towards the employees is to motivate to perform goals and rewards, 23.5% satisfy by fulfilling needs while 5.9% feel that their relationship is that of family feeling and an additional one 5.9% furnish them with an occasion for self development.

Suppliers: 5.9% have their objective as mutual benefits, which also elaborate that it feels its relationship is that of a teammate (29.4%). balance is equally divided in terms of relationships. Roughly 47.1% company's objective vis-à-vis suppliers are capability and price of product related.

Community: Over 52.9% of the associates have social welfare as the objective towards the community. 11.8% associates have stated that their relationship with the community is that of a family member so as to furnish help to the target group who needs it and 17.6% have stated that their relationship is amiable and friendly. They are sensitive to the needs of the community and an additional one 17.6% contain community welfare in the objectives of the company

Attributes as prominent reasons for contributing to social causes:

The gift study of the researchers is to study the guess of the company's corporate social responsibility. The variance chart and the scree plot show that 4 components elaborate 83.03% of the variance. The important component prognosis was used using varimax rotation method. The rotation converged in 5 iterations. The resultant rotated component matrix was analyzed. The constituents of the four factors are identified as

Factor 1: (Customer oriented)

Customer goodwill .966

Customer loyalty .966

Philanthropy .752

Factor 2: (Ethical oriented)

Projecting the firm as one with explicit moral judgment .873

Projecting an upright character of the firm .944

Contributing to a specific cause .637

Bottom-line benefits .618

Factor 3: (Community oriented)

Helping the community .894

Social accountability .889

Factor 4: (Humane oriented)

To take off the image of the firm as a faceless institution. .903

Bottom-line benefits - .542

Philanthropy in the first component and bottom-line benefits in the second component seem to be out of line of the components. Else the first component talks about customer relationships, the second on moral character of the firm and the third on social responsibility. Bottom-line also plays an prominent role.

Conclusion:

The study was conducted to find out the company's reasons towards corporate social accountability on cause linked and its impact on the company's brand image and sales. The prominent factors that influence the firm to contribute are: customer oriented, Ethical oriented, community oriented, Humane oriented.

Financial benefits in terms of tax benefits also are important, though the responses to this issue seem to be guarded.

Companies must create awareness to the various stakeholders regarding its gift to corporate social accountability straight through its affiliation with social cause straight through event supervision (Mumbai marathon events) & firm websites as it is directly linked to growth in sales and brand loyalty. India being a developing country with over 250 million strong middle class families has a large potential for any marketer & at the same time it can reserve quiet a good estimate of causes which benefits the community at large. E.g. Due to doing of Cry' a Ngo 89244 children lives were constantly transformed 1013 communities experienced 100% school enrollment, 159 customary health centers began functioning and long term recovery agenda were initiated in Roughly 100 tsunami affected villages in Tamilnadu, Andhra Pradesh and Kerala and earth quake relief & recovery programs were initiated in 11villages in Jammu & Kashmir. So we can conclude that corporate social accountability and cause linked marketing is beneficial both for firm and the society.

Limitations:

While associates have responded, 25% of them (spokesman) have requested that the source should not be mentioned - i.e. The firm should not be identified. The sample size being very small, the follow of the study may not relate the whole population.

References:

Carroll, A.B. (1979), "A three-dimensional conceptual model of corporate performance", Academy of supervision Review, Vol. 4 No. 4, pp. 497-505.

Matten, A. And Crane, D. (2005), "Corporate citizenship: toward an extended theoretical conceptualization", Academy of supervision Review, Vol. 30 No. 1, pp. 166-79.

Sethi, S.P. (1995). "Introduction to Amr's extra topic forum on shifting paradigms: Societal expectations and corporate performance." Academy of supervision Re view, 20, pp.18- 21.

Waddock, S. (2004), "Parallel universes: companies, academics and the strengthen of corporate citizenship", firm and community Review, Vol. 109 No. 1, pp. 5-42.

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Non-Profit responsibility - The executive Director

Non Profit Bylaws Template - Non-Profit responsibility - The executive Director

Hello everybody. Yesterday, I learned all about Non Profit Bylaws Template - Non-Profit responsibility - The executive Director. Which is very helpful if you ask me so you. Non-Profit responsibility - The executive Director

This description speaks to the challenges faced by the board of directors of a non-profit, charitable, society in the option and administration of its administrative director.

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It's hard to believe that it was 18 years ago (1991) that the United Way of America scandal began to unfold and its administrative director, Bill Aramony, was convicted in 1995 of a amount of wrongdoings together with embezzlement and spending funds unwisely. United Way was probably the most recognizable public charity in the country and it remains so today.

The governance of the United Way was placed, appropriately, in the hands of its board of directors. The board was comprised of Ceos of large, well-known clubs in corporate America. Unfortunately, its administrative director was allowed to guide the affairs of the society with very itsybitsy accountability. Hence, it was only a matter of time before problems were bound to emerge. It seems easy to overlook the fact that non-profits are business entities, quite a few of them are very large organizations, and many have large incomes.

Curiously, it has come to be base over the past decade to replace the title of 'executive director' with 'president.' This is technically incorrect; an administrative director is the chief worker of the charitable society and reports to its board; the 'president' is, by statute, the head (and often known as the chair) of the board of directors, supposedly elected by the membership of the society or its board, depending upon the process outlined in the Bylaws. While also technically incorrect, using the title of 'president' in lieu of 'executive director' may even add to blurring among unaware board members, causing them to rely more heavily on the 'president/executive director' than is prudent. (However, this is no excuse for the board member not knowing indubitably the duties of his/her board position.)

It may be beneficial to variation the issues of accountability for administrative directors in very large non-profits to those in small non-profits. Albeit purely anecdotal, it appears that large non-profits operate very similarly to large for-profits. Ceo accountability and board oversight can be low while Ceo operate is demonstratively excessive. The Aramony scandal of 1995 has similarities to the Kenneth Lay (Enron) scandal of 2001 in that too much power and authority was vested in the top officers of the society and too itsybitsy accountability was required by its board of directors.

Beyond the scope of this description - but an issue worthy of its own argument in the future - is the cronyism too often seen in the board room. Ceos tend to ask friends and colleagues to serve on the board - as do board option committees - and the practice is base in both for-profit and non-profit organizations alike.

Systems failures, such as the United Way and Enron examples, clearly paved the way for the Sarbanes-Oxley (Sox) legislation that is intended to supply stronger oversight of for-profit organizations. The subject of previous articles, and the focus of the town for Ethics, Governance, and accountability (Cega), acknowledges that Congress has moved swiftly to empower the Irs to step up its oversight of non-profit entities.

In a previous Cega article, "Non-Profit Accountability: A Board Gone Awry," the rude and irresponsible behaviour of current board members towards a previous board member (with considerably more experience) was illustrated. There was also a promise that a future description would speak to the issues fascinating the administrative director.

This is that article.

In this example - which could well come to be a full-blown case study - a tenured administrative director retired after nearly 40 years of service. He was well known in his area of expertise and widely regarded as a man of great integrity and concern for those colse to him. His ego was virtually non-existent, he relied on his staff to do their jobs, and was supportive of creativity. He was very focused on the mission of the organization. Transfer of such an private is difficult for even the most ardent boards. In this case, a specialized search firm was engaged, candidates were identified, and finalists were interviewed by the board. A option was made by a 5-4 vote of the board. (This is not a good sign when joining a new organization.)

Then the problems began...

Unfortunately, the excellent private did not have the valuable sense for the position of administrative director. This was discussed with the board in the final interview and was highlighted by the search firm. While the candidate pledged to gain those skills on the job, once hired, he immediately reneged on his promise. Immediately upon advent to the non-profit organization, the new administrative director began to conclude employees, eliminate positions, dismantle programs and change the focus of the society in a dramatic fashion.

The previous administrative director and the board of directors had worked well together for some years to define a very exact mission for the non-profit. It was immediately clear that the new administrative director had ignored the direction in case,granted by the board. There was clearly a personal program by the new administrative director and, even worse, it was intentionally made public. When confronted by the chair and vice chair of the board, the administrative director turned the board against itself and worked his 5-4 option vote to full advantage. But such gross insubordination is not sustainable. In only 10 months, the entire society was destroyed, the best board members had resigned in frustration, the administrative director left town under a cloud of suspicion and was subsequently sued by the society for misuse of funds.

Today, this charitable society is being led by a new board with no experience, itsybitsy perspective, and even less institutional knowledge. Adding to the challenge was the option of a new administrative director using a process added described below: tapping the amount two someone in the organization, who has even less sense than the now-departed predecessor. The future does not look bright; but, pressure to make it appear fascinating can indubitably lead to worsening conditions.

What can be learned from this example?

First and foremost, it is very difficult to be a board member. It is not a job that should be taken lightly. Governance, ethics, and accountability are valuable and boards must expect and uphold the highest standards for the non-profit organization. Additionally, boards must move swiftly and firmly to deal with rogue administrative directors that blatantly disregard board policy and mission. The most leading lesson from this example is the severity and immediateness of the negative consequences to a non-profit society - even one with a strong board, a known mission, and dedication to succeed. This example also illustrates the challenges, time commitment, and accountability of a board member; particularly, when the board member is a volunteer of a non-profit organization.

One of the key jobs of the administrative director is to implement the policies and foresight of the board of directors. While there is often a natural tension between the non-profit board (at least if the board is truly engaged in the charitable mission) and its administrative director, both need to work well together to successfully added the mission of the organization. And, the administrative director is most often the 'public face' of the organization, so issues of credibility and ethical behavior are sublime to the perception of the society in the community and constituency it serves.

With regard to the option of administrative directors in small and medium-sized non-profits, at least two methods are easy to characterize: (1) the use of a search firm to recognize some top candidates for extreme option by the board of directors; and (2) the promotion of the 'number two' someone among the non-profit staff for, supposedly, all the right reasons: he/she has been there a long time, knows the organization, time is critical, budgets cannot withhold the use of search firms (or the wage of the previous administrative director), etc. With the current economic crisis, arguably, funders are seeing for the most worthy of causes and best-run charities before they make their contributions. Proper administrative director option is critically important. In addition, prompt discipline of administrative directors is equally important.

If a disaster of this magnitude can occur with a strong board of directors in a charitable society with a solid past and a promising future, it is clear what can (and does) happen to non-profits with weak boards and imprudent administrative directors. There has never been a more leading time for non-profit governance to be fully addressed, given the increased Irs scrutiny, economic pressures, and funding shortages.

As is normally the case, only the best will survive and thrive.

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