BOMBAY, 16 December 2002 — With new year just round the corner, this week, we take a look at the various ways in which the Indian corporate world is going around goodwill hunting and in the bargain, spreading a lot of good.
Yes, the new buzz in the Indian industry is not brands and globalization but social responsibility or also known as corporate social responsibility. A number of research studies show that socially responsible corporate behavior has a positive impact on business economic performance and adds to shareholder value. The range of benefits include: Improved financial performance, reduction in costs, enhanced brand image, increased sales and customer loyalty and increased profitability.
Over the past few months, it has been noticed that more and more companies, be it Indian or multinationals (MNCs), have adopted various ways and means of “giving back to the society”. Many call this social responsibility as an emotional connection between the image of the company and the customer. The growing perception is that it is now extremely important to not just do good business but at the same time, take care of the people and ease social difficulties. This need to do good has gone up all the more after the most successful businessman in the world, Bill Gates, donated more than generously to the cause of AIDS in India.
Big companies like Tata, Birla’s have always believed in this concept of doing good and have right since their inception, done immense good. Infact if these two groups command immense respect in India it is mainly attributed to this goodwill spirit of theirs. Both these groups have built schools, hospitals, donated generously and have thus earned respect from the millions of Indians. Even today, it is a great matter of pride for many Indians to work with these groups and it is by default that one finds stocks of these groups in portfolios.
Amongst the new generation, Reliance and Infosys have also done more than share of social responsibility. But now, this buzz of doing good for the society seems to have caught on.
What is indeed a very pleasant surprise is that MNCs have also jumped into this new bandwagon. Their objective is to mainly “localize”. They feel that by doing good for the society, they are able to present their company in a more local way, removing the feel of the company being foreign. And another good which it begets is that by creating this positive environment, it minimizes the potential for boycotts and strikes.
Marketing consultants and PR agencies claim its impact is being felt in terms of bottom-line benefits and greater goodwill toward brands Dell, the world’s second largest PC maker and a relative late entrant in the Indian infotech scene. It has teamed up with non-governmental organizations (NGOs) in Bangalore, to adopt underprivileged children’s communities. It has donated PCs, and runs awareness and training programs for them. For this, Dell has added a personal touch by creating a special task force of employees who spend a part of their time to train these children, as part of Global Involvement Week, a worldwide initiative taken up by the company.
BP, earlier known as British Petroleum, targeted 2.4 lakh truckers by organizing health camps at the dhabas (small road side eateries) dotting highways across the country.
Wockhardt, on Nov. 14, organized a health check up on the occasion of World Diabetes Day. It also worked out a co-marketing arrangement with Bayer AG for an anti-diabetic drug Acarbose.
Hindustan Lever, India’s largest FMCG , has also always kept the social cause in mind. And in its latest endeavor, it organized a ‘Swasthya Chetna’ campaign in 15,000 villages across eight states. Taking a cue from its TV campaign for Lifeboy soap, of spreading the message of adopting the practice of washing hands with soap and water before meals, it educated the people how dangerous diseases like dysentery and diarrhea, a major cause of death in our villages, can be reduced by about 40 percent.
Across the globe, there are a host of companies that have always led the way. Ford Motor Company has the Ford Foundation to channel its focus on meaningful ways in which to contribute to the society. GE (the world’s most admired company) has a series of social and environmental projects (GE Fund and Elfun,) which contribute to the global communities in which the company operates.
Procter & Gamble, which markets 300 brands to nearly 5 billion consumers in 140 countries, has emerged as the number one in corporate image and is socially quite active. P&G is driven by the clear understanding that if a company is to survive and thrive today, if it is to be believed in and subscribed to by its stakeholders, it must be responsible to the community in which it operates.
Corporations do not operate in a universe composed solely of shareholders. They exist within larger political and social entities and are subject to pressures from other members of those networks. For a company to earn public credit for its behavior, it has to be socially responsible, only then can it be called a full company, or else, it will remain a mere profit and loss organization.