CORPORATE SOCIAL RESPONSIBILITY OR BUSSINESS STRATEGY

Transcription

1 CORPORATE SOCIAL RESPONSIBILITY OR BUSSINESS STRATEGY Sanjeet Singh, BBSB Engineering College, Fatehgarh Sahib Gagan Deep Sharma, BBSB Engineering College, Fatehgarh Sahib Gurpreet Singh Chahal, BBSB Engineering College, Fatehgarh Sahib ABSTRACT CSR provides a number of benefits to society and business. There doesn t exist any universally accepted definition of CSR so it is interchangeably used with corporate citizenship, corporate responsibility, or social action program. We can list the following factors for the rapid growth of CSR. This research will investigate whether the organizations using Corporate Social Responsibility with the motive of social welfare or with the motive of business strategy of expansion and promotion. The sample size for the study is 100 and it have been selected form the North India (Chandigarh, Ambala, Ludhiana, Mandi Gobindhgarh and Khanna). We interviewed the managers and supervisors working in the different organization and taken their views about the CSR using by other organization. Primary data have been used for the research. The statistical tools, i.e., Descriptive statistics, Regression and Chi square test have been used for the evaluation purpose. Keywords: Corporate Social Responsibility, social welfare, Business strategy, Chi square test. 1. INTRODUCTION OF THE STUDY Corporate social responsibility (CSR) refers to building socially responsible businesses. CSR is a concept through which organizations voluntarily collaborate social and environmental issues into their operations and in their interaction with their employees, customers, investors and government. The survey concluded that CEOs are failing to recognize the benefits of implementing Corporate Social Responsibility strategies, despite increased pressure to include ethical, social and environmental issues into their decision-making processes. (ASOCIO Policy Paper June 2004) Electronic copy available at:

2 Sustainability of CSR is closely related to their decisions of their activities which should not affect social and environmental state immediately or in long-term. CSR has become a challenge in the strategy of business. CSR is getting government and international government support rapidly. CSR provides a number of benefits to society and business. There doesn t exist any universally accepted definition of CSR so it is interchangeably used with corporate citizenship, corporate responsibility, or social action program. We can list the following factors for the rapid growth of CSR: Economic considerations Ethical considerations Innovation and learning Employee motivation Risk management or risk reduction Access to capital or increased shareholder value Reputation or brand Market position or share Strengthened supplier relationships Cost savings In the first view it looks that CSR is all about setting policies, objectives and targets in the main areas like health and safety, environment, social and community. IN the present report we will find out the advantage of CSR in the contest of society with the help of the research. 2. OBJECTIVES OF THE STUDY. To study the impact of CSR on the society. To study the impact of CSR on the organizations. To evaluate the motive of the organization for CSR Electronic copy available at:

3 3. REVIEW OF LITRATURE A number of researchers have been study the CSR. Fry Keim & Meiners,( 1986), Robin, Donald & Reidenbach, (1987),Milesand Covin, (2000), ), Brown (2001) McWilliams and Siegel (2001), Edenkamp (2002).Kotler and Lee (2005), Becker-Olsen et al( 2006), (Diana Verde Nieto( 2006) Xueming Luo,Bhattacharya ( 2006), Amit Bapna ( 2007), Bert van de Ven, (2008) ), Oana Branzei,( 2010) investigated the same topic. Researchers evaluated the different aspects of the CSR. Fry Kein & Meiners (1986) examine the effect of corporations pursue growth through globalization.donald & Reidenbach, (1987) study that stake holders face the prospect of a devalued corporate image and or legal reprisal. Milesand Covin, (2000) investigate that CSR behavior is a mechanism by which to build reputation and enhance competitive. Brown (2001) look at the impact of business on society and environment.. McWilliams and Siegel (2001) survey the demand of CSR-relate product attributes. Edenkamp (2002) evaluate the role of CSR especially in building up trust of the consumers. Kotler and Lee (2005) study the today s competitive market environment and corporate social responsibility. Becker-Olsen et al( 2006) examine the corporate credibility, corporate positioning, and purchase intentions towards society. Diana Verde Nieto (2006) study the connection between the CSR and marketing. Xueming Luo,Bhattacharya (2006) inspect that CSR contributes positively to firms market value. Amit Bapna (2007) look over the brand building process needs a lot of investment both finacial as well as intellectual. Bert van de Ven, (2008) scrutinize that investments in corporate social create value for stakeholders of the corporation, but also for a corporation. Oana Branzei,(2010) examine that Tata Group is the pioneer in India for CSR activities. Different researchers reveal different facts about the CSR. Fry Kein & Meiners (1986) conclude that as corporations pursue growth through globalization, they haven countered new challenges that impose limits to their growth and potential profits while some companies use CSR methodologies as a strategic tactic to gain public support for their presence in global markets, helping them sustain a competitive advantage by using their social contributions to provide a subconscious level of advertising. Donald & Reidenbach, (1987) terminate that 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. Milesand Covin,(2000) finish off that firms using CSR behavior to maximize profits, the use of CSR behavior as a mechanism by which to build reputation and enhance competitive advantage is well accepted. Brown (2001) unearth that CSR is reported to affect, either directly or indirectly, consumer product responses, customercompany identification, customer donations to non profit organizations and more recently customers product attitude. McWilliams and Siegel (2001) reveal that consumers tend to "demand" CSR-related product attributes for product differentiation (such as social and environmentally responsible sourcing and manufacturing) when consumer income increases.. Edenkamp (2002) find that consumers consider switching to another company'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 behaviors.. Kotler and Lee (2005) conclude that marketing tools and techniques can also be used in projects to promote good causes in a more effective way.. Becker-Olsen et al (2006) find that if companies do not inform consumers properly about the

4 CSR initiatives they take, they will not reap the benefits of their investments in CSR. Corporate credibility, corporate positioning, and purchase intentions are all enhanced when the initiatives are proactive towards society. Diana Verde Nieto (2006) study that companies such as Marks & Spencer have already started to improve the links between marketing and CSR, with impressive results. According to M&S s CSR chief.mike Barry, Look Behind the Label has been their most successful consumer communications campaign ever.. Xueming Luo, Bhattacharya (2006) conclude that Companies should realize that CSR initiatives can represent a robust public relations strategy, particularly in the current market environment in which stakeholders such as customers, may have strong social concerns. Amit Bapna (2007) terminate that for a company to be recognized and respected as a responsible brand of the modern day world, the entire business model has to be made sustainable one that ensures that it is not exploiting any of its stakeholders. Bert van de Ven, (2008) unearth that for marketing of CSR corporate can use strategy of reputation protection and improvement, the strategy of building a virtuous corporate brand and ethical product differentiation. Oana Branzei,(2010) unearth that despite the global recession, the Tata Group topped the economic value creation charts. In , the group had grossed US$70.8 billion in revenues. 64.7per cent of the Groups revenues were now coming from outside India. It explores value-creation, leadership, ethics and sustainable development on the backdrop of rapid internationalizations and shifting stakeholders' expectations for corporate social responsibility. Researchers have studied the corporate social responsibility or business strategy at the global level but none of the study concentrated on the this whether the organizations doing CSR with the motive of social welfare of with the motive of business expansion. The present research will concentrate on the above said topic. 4. RESEARCH METHODOLOGY Present research will study that whether the organizations using CSR with the motive of social welfare or as a business strategy. The sample size of 100 is taken from the employees (Managers, Supervisors) of companies of the cities of North India. The cities are Chandigarh, Ambala, Ludhiana, Mandi Gobindhgarh and Khanna. Primary data is used in this research, which is collected with the help of questionnaires distributed among the employees (Managers, Supervisors) of different organizations of North India. Following tools are used for data analysis. The mean is a particularly informative measure of the "central tendency" of the variable if it is reported along with its confidence intervals. Mean = (Sx i )/n Usually we are interested in statistics (such as the mean) from our sample only to the extent to which they can infer information about the population. The confidence intervals for the mean give us a range of values around the mean where we expect the "true" (population) mean is located (with a given level of certainty).

5 The standard deviation is a commonly used measure of variation. The standard deviation of a population of values is computed as: where s = [S(x i -m) 2 /N] 1/2 m is the population mean and N is the population size The sample estimate of the population standard deviation is computed as: where s = [S(x i -x-bar) 2 /(n-1)] 1/2 x-bar is the sample mean and n is the sample size The variance of a population of values is computed as: s 2 = S(x i -m) 2 /N where M is the population mean and N is the population size The unbiased sample estimate of the population variance is computed as: s 2 = S(x i -xbar) 2 /n-1 where xbar is the sample mean and n is the sample size where: M j N s 4 is equal to: S(x i -Mean x ) j is the valid number of cases is the standard deviation (sigma) raised to the fourth power The general purpose of multiple regression is to learn more about the relationship between several independent or predictor variables and a dependent or criterion variable.

6 A line in a two-dimensional or two-variable space is defined by the equation Y=a+b*X; in full text, the Y variable can be expressed in terms of a constant (a) and a slope (b) times the X variable. The constant is also referred to as the intercept, and the slope as the regression coefficient or B coefficient. Multiple regression procedures will estimate a linear equation of the form: Y=a+b 1 *X 1 +b 2 *X b p *X p The regression line expresses the best prediction of the dependent variable (Y), given the independent variables (X). However, nature is rarely (if ever) perfectly predictable, and usually there is substantial variation of the observed points around the fitted regression line. The deviation of a particular point from the regression line (its predicted value) is called the residual value. Further, chi square test used for check the feasibility of the variables. Chi-square is a statistical test commonly used to compare observed data with data we would expect to obtain according to a specific hypothesis. For example, if, according to Mendel's laws, you expected 10 of 20 offspring from a cross to be male and the actual observed number was 8 males, then you might want to know about the "goodness to fit" between the observed and expected. Were the deviations (differences between observed and expected) the result of chance, or were they due to other factors. How much deviation can occur before you, the investigator, must conclude that something other than chance is at work, causing the observed to differ from the expected. The chi-square test is always testing what scientists call the null hypothesis, which states that there is no significant difference between the expected and observed result. The formula for calculating chi-square ( 2 ) is: 2 = (o-e) 2 /e That is, chi-square is the sum of the squared difference between observed (o) and the expected (e) data (or the deviation, d), divided by the expected data in all possible categories 5. FINDINGS AND ANALYSIS DESCRIPTIVE STATISTCS Descriptive Statistics Mean Minimum Maximum Std.Dev. Strategy Society Org Employ Popularity Business Profit

7 Taxes More Reputation Review Today Success Sales Objective Social Improves Five options are used 1. strongly disagree 2. disagree 3. neutral 4. agree 5. strongly agree. CSR is a business strategy is shown by the mean of first variable which is 3.98~4.00. In the most of the cases mean are favorable. In most of the cases std. dev. is less than 1. so there is less variance and result is favorable. ANOVA Model Sum of Squares df Mean Square F Sig. 1 Regression a Residual Total In this table, sum of squares in regression is35.397, df is 16,mean square2.12 and F is The significant value is REGRESSION ANALYSIS Regression Summary for Dependent Variable: STRATEGY R= R²= Adjusted R²= F(16,83)= p Beta Std.Err. - of Beta B Std.Err. - of B t(83) p-level Intercept Society Org

8 Employ Popularity Business Profit Taxes More Reputation Review Today Success Sales Objective Social Improves In the regression table, the dependent variable is strategy R= R²= Adjusted R²= F(16,83)= p. The p-value in the case of Org is In the case of sales its Rest of the values are shown in the table CHI SQUARE TEST Test Statistics strategy society Org employ popularity business Profit Chi-Square a a a a a a a Df Asymp. Sig a. 0 cells (.0%) have expected frequencies less than 5. The minimum expected cell frequency is Test Statistics taxes more reputation review today success Sales objective Chi-Square a a a a a a a a

9 Df Asymp. Sig a. 0 cells (.0%) have expected frequencies less than 5. The minimum expected cell frequency is Test Statistics social Improves Chi-Square b a Df 3 4 Asymp. Sig a. 0 cells (.0%) have expected frequencies less than 5. The minimum expected cell frequency is b. 0 cells (.0%) have expected frequencies less than 5. The minimum expected cell frequency is In the chi square test, if the asymptotic value is less than 0.05 then it is favorable and can be applied to whole universe. In the above table, all the asymptotic values are SO its feasible to generalize the finding in the case of the universe. 6. CONCLUSION The research shows that the Corporate Social Responsibility was started with the motive that the organizations will do some work for the welfare of the society because society is bearing a cost because of the organizations. But most of the organizations are using it as a business strategy and for the expansion of the business, as well as for advertisement. CSR increases the brand value of the organization. It gives a positive effect on the sale of the organization as well, because it creates an emotional impact on the mind of the consumer. There are some benefits of the CSR for society as well. To conclude we can say that the CSR creates a positive picture of the organization in the society but most of the companies using it as a business strategy.

10 7. REFERENCES: Amit Bapna 2007, Corporate Social Responsibility, USP AGE, July, pp Becker-Olsen, Bert van de Ven 2008, An Ethical Framework for the Marketing of Corporate Social Brown, K 2001, Corporate Social Responsibility: Perceptions of Indian Business viewed 24 August 2010, public/pdf/. Diana Verde Nieto 2006, Marketing and CSR, viewed 8 August 2010, Edenkamp, P 2002, Insights into how consumers are thinking, how they are acting and why? Brandweek, vol. 43, no. 36, pp Fry, L. W, Keim, & Meiners,R.E 1982, Corporate Contributions: Altruistic or for Profit?, The Academy of Management Journal, vol.25, no.1, pp K. L., Cudmore,B. A & Hill, R.P 2006, The Impact of Perceived Corporate Social Kotler, P & Lee, N 2005, Corporate Social Responsibility. Doing the Most Good for Your Company and Your Cause, John Wiley and Sons, Hoboken, New Jersey. McWilliams, Abagail and Donald Siegel 2001, 'Profit Maximizing Corporate Social Responsibility', Academy of Management Review vol.26, pp Miles, M. P. & Covin, J,G 2000, 'Environmental Marketing: A Source of Reputational Competitive and Financial Advantage', Journal of Business Ethics, vol. 23, pp Oana Branzei 2010, Tata: Leadership With Trust, Richard Ivey School of Business Case Collection London, May 11. Robin, Donald, P & Reidenbach, R, Eric 1987, Social Responsibility, Ethics, and Marketing Strategy: Closing the Gap Between concept and application, Journal of Marketing, January vol. 51. Responsibility on Consumer Behaviour, Journal of Business Research, vol.59, pp Responsibility, Journal of Business Ethics (2008) 82: Xueming Luo & Bhattacharya, C.B 2006, Corporate Social Responsiblity, Customer Satisfaction and Market Value, Journal of Marketing, October, vol. 70, pp