Academic journal article Asia Pacific Journal of Management & Entrepreneurship Research

A Case Study on Holistic View of CSR Activities at Indian Oil Corporation (IOC)

Academic journal article Asia Pacific Journal of Management & Entrepreneurship Research

A Case Study on Holistic View of CSR Activities at Indian Oil Corporation (IOC)

Article excerpt

Introduction

Corporate Social Responsibility or CSR of a corporation means obligation to act in a manner, which will serve the best interests of the society and which leads in the direction of positive contributions to human betterment. CSR refers to a company linking itself with ethical values, transparency, employee relations, compliance with legal requirements and overall respect for the communities in which they operate. CSR embraces the range of economic, legal, ethical and discretionary actions that affect the economic performance of the firm. A significant part of a firm's CSR, therefore is complying with the legal or regulatory requirements faced in day-to-day operations. To break these regulations is to break the law, which is not socially responsible. Strategic CSR focuses more on the ethical and discretionary concerns that are less precisely defined and which there is often no clear societal consensus.

Ideally, leaders should address stakeholder concerns in ways that carry strategic benefits for the firm. CSR is not about saving the whales or ending poverty or other worthwhile goals that are unrelated to a firm's operations and are better left to government or non profits. Instead, CSR is about the economic, legal, ethical and discretionary issues stakeholders view as affecting the firm's plans and actions. The solutions to these issues, the overlap where economic benefit and social benefit meet, is at heart of any successful CSR policy. It means that they are not doing business merely for maximizing their profits or to make their shareholders happy. Nowadays this concept has undergone metamorphosis to include accepting of moral responsibilities towards the stakeholders i.e. the consumers, employees, labour, suppliers, government and the society and community. Therefore, the fact of CSR has to be carefully devised keeping in mind the specifics of the organization and the kinds of demands that can be made upon it as a corporate citizen by all its relevant stakeholders. In short CSR calls for the care of people, earth and generating profit by the business.

Strategic CSR

The strategic CSR Model, shown in figure below, visually summarizes the relationship between CSR and strategy. Corporate success assumes that strategy matches internal competencies with external opportunities in such a way that the firm achieves its mission as it strives toward its vision. An effective CSR policy requires proactive action (regarding strategic initiatives) that helps the company achieve its strategic and CSR objectives. We, therefore, see CSR as a competitive differentiator for a firm, as well as a form of brand insurance, in which the brand represents the perception of the company by each of its key stakeholder groups. As societies in general become more affluent, societal expectations evolve, and communication technologies become even more widespread, greater and greater demands for CSR will result. Certainly, moral and rational arguments exist for companies to act in a socially responsible manner; however, a strong economic incentive also exists to be perceived as a net contributor within a society and provides the strongest reason for implementation of CSR with long term viability of the organization. This economic argument surfaces daily in advertising and public relations campaigns. The sophisticated level to which the crisis management industry has evolved in the United States further demonstrates the value of reputation. Investors, as one stakeholder, "are willing to give higher valuations to companies that are deemed good citizens. Put another way, investors give some companies with good track records the benefit of the doubt.

Companies understand the value of being perceived as friendly neighbors' and good corporate citizens. Until now, however, managers have largely confined this to public relations because hey were able to control the information that determined the public face of the corporation. …

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