India is the only country to make Corporate Social Responsibility (CSR) mandatory in the year 2014, under the Companies Act 2013. According to this law any company either public or private limited with a net worth of 500 crores or a turnover of 1000 crore, should spend a minimum of 2 percent of its average net profit on CSR activities. The organizations should initiate social programs under the categories of poverty, hunger, education, a donation as a part of CSR activities. The most popular program Daan Utsav – the Joy of Giving Week is being organized across India from past 11 years. This is the most popular week in October where all the corporates conduct CSR programs by collaborating with NGO’s or the employees of companies volunteer and participate independently in this one-week celebration. Being socially responsible should not be applicable only for a week as a mandatory program for corporates, generally performing CSR activities can benefit companies in various ways. Following are some of the benefits a company can obtain through CSR initiatives -
1. Brand Recognition –
A company can gain great recognition in the market as well as society by organizing CSR activities. These programs may not be limited to donating things to the needy people or working with NGO’s, sometimes it may also include initiatives like helping the mass with major issues that may bring a social recognition to the company. For Example – Infosys, a company that is highly recognized for it’s helping hand. Sudha Murthy, Chairperson Infosys, is popular for her social works and this has created Infosys as a highly reputed brand globally. Today, CSR can be considered as one of the major factors for a successful business. Brand recognition helps any company to sustain for a long time in the industry.
2. Customer Loyalty –
CSR programs develop a positive attitude in customers towards companies. Also, 55 percent of the customers believe that companies that are engaged in social programs provide loyal services to their clients or customers. Today’s youth prefer to do business with companies with social messages or organizations offering services towards a social cause.
3. Employee Satisfaction –
Same as customer engagement the employees show a loyal attitude to the companies involved in CSR initiatives. The way a company treats the needful people depicts the image of company’s respect towards its employees. By providing opportunities to your employees of interacting with the surrounding society will boost motivation and feels proud to be a part of your company. Through these activities the employee’s participation in the functioning of a company increases and this results in highly productive work.
4. Social Cause with Less Cost –
A CSR activity does not require any large amount to be spent on it. It can be organized will less expenditure and in one or the other way it helps a company in saving its expenditure and increases its market value and raise in revenue and profit. For Example – Many FMCG products today are coming out with an idea of contributing some amount in providing education to the needy students or development programs. They promote their product by keeping forward this idea to the customers, through which some amount of each product will be used for a social cause. These are part of CSR campaigns conducted by the popular FMCG products. This strategy has increased the product value and demand for such products is increasing as the CSR campaign is getting popularized in India.
The main motto of every company is to sustain the market and gain high revenue and profitability. By conducting CSR activities companies can gain all these with social recognition. This initiative is announced mandatory by the Government of India for all the corporates in order to create social awareness among the society and the industry, also to help the needy people of the society. This will also in a way make the corporates aware of the necessities of the underprivileged population of the country. Hopefully, by organizing CSR activities, the reputed corporates can give a moment of joy to those who are in need of it.