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csr report

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CORPORATE SOCIAL RESPONSIBILITY "Social responsibility of a business is to increase its profits." - Milton Friedman.1 According to Michael.E.Porter, the corporations are going for 'strategic philanthropy' due to the ever increasing pressure from investors for short term profits. But, what the companies believe is strategic is never truly strategic. Increasingly philanthropy is about giving the poor loose change and is a form of advertisement or public relation stunt. So, should companies engage in philanthropy at all? 2 3R. M. Kanter says that a new paradigm for innovation is emerging: a partnership between private enterprise and public interest that produces profitable and sustainable change for both sides. Today, the author says, many leading companies are seeing the social sector as an opportunity. The author feels some companies are moving from CSR to corporate social innovation. Traditionally, companies viewed the social sector as a dumping ground for their spare cash, obsolete equipment and tired executives which created any lasting changes. But things are changing; companies are viewing community needs as opportunities to develop and demonstrate business technologies, find and serve new markets and solve long standing business problems. They focus on inventing sophisticated solutions through a hands-on approach. ...read more.


This alleviates poverty in return stabilising developing regions, reducing conflicts et al. Prahalad and Hammond propounds that MNC's could make a difference in the future if only they utilise their reach, scale and resources to bring innovative products and services to the poor. To achieve this, the MNC'S need not get involved in social development but only act in their own self-interest thus creating a very sustainable model. The synergy between the needs of the poor and the needs of MNC'S for growth provides immense potential. GRAMEEN BANK One such corporation is the Grameen Bank in Bangladesh. It is a micro-finance organisation and community development bank started in Bangladesh that provides small loans to poor people without any collateral.6It was founded by Nobel laureate Muhammad Yunus, an economist, in 1976 with just $27/-from his own pocket, is one of the pioneers in the micro-credit lending schemes for the poor, in Bangladesh, now with 6.6 million borrowers of which majority are women.7 The main philosophy of Grameen Bank is that no person is poor because they lack the skill but because of the policies and systems in the society. So, micro finance/micro credit (Grameen credit) ...read more.


CONCLUSION : By empowering the 'bottom of pyramid' customers, what effectively is being done is that a new market is being created which demands innovative products and the corporations need to consider this to be their core competency rather than just a make-believe corporate social responsibility. Innovation in technology is going to spearhead the entry of MNC'S into this sector which would drastically reduce the overheads and also the poor are keen to learn about new technologies as cited by Prof.Prahalad. Ex: ICICI entering microfinance in India, through their online banking system to penetrate the BoP customers, as well as tie-ups with MFI and NGO'S. In all, corporate social responsibility should be defined as empowering the lowest segment of the community thereby creating a sustainable model for the general betterment of the society as well as a lucrative proposition for the private corporation. 1 Milton Friedman, 1970, NYTimes magazine. 2 Harvard Business Review on Corporate Responsibility; 'The competitive advantage of Corporate Philanthropy'- Michael.E.Porter, Mark.R.Kramer. 3 Harvard Business Review on Corporate Responsibility; ' From spare change to real change'-The social sector as Beta site for business innovation.-Rosabeth. Moss. Kanter 4 http://wikipedia.com/wiki/bottom_of_the_pyramid 5 The future at the bottom of the pyramid - By C.K.Prahalad 6 http://en.wikipedia.org/wiki/Grameen_Bank 7 http://news.bbc.co.uk/1/hi/world/europe/6047020.stm 8 Morduch, Jonathan. 1999. The Microfinance Promise. Journal of Economic Literature, 37 (4): 1569-1614; Schwab foundation research. 9 http://en.wikipedia.org/wiki/Microfinance#Development_of_the_sector_in_India 10 http://www.grameen-info.org/bank/index.html ?? ?? ?? ?? ...read more.

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