Why do organizations do business ? The only two motives for any private organization do undertake business activity are - I: to make money today. II : To make more money tomorrow. All actions, decisions for a business unit are / have to be directed keeping these two motives in the central frame. This has been so far, the unsaid, yet widely acknowledged fact in the business world. From erstwhile “tradesman” to Carnegie and Mittal, generations have been doing the activity of business based on the “selfish” motive of wealth generation. Means for disbursement of this wealth has had contradictory policies in capitalist and socialist economies, however will pursue that topic sometime later.
But, currently, thanks to a bunch of corporate jokers and mediapersons, a CSR (Corporate Social Responsibility) dimension to business is attached. Almost all organizations in India and abroad do indulge in such CSR initiatives. Such acts of charity by organizations is being taken by one and all in a positive spirit, and hordes of CEOs and MDs, donning the Who’s who list have been talking about “their” CSR activities with pride. Too much an emphasis is nowadays being laid on the CSR aspect of an company, with many organizations including my earlier and current companies, specifically recruiting “experts” for the same. From Sankaralingam to Ratan Tata, Narayanmoorthy to Roongta, from A.M.Naik to Ambanis and even Mallya, all have openly stated their CSR intiatives as a part of “their” duty to pay back to the society.
Should Organizations resort to CSR ? My take : NO, Absolutely NOT.
Most of the intellectuals would dismiss my take as idiotic or foolish, but as I have been many a times accused of both, I do not mind of stating my conviction once again to earn that pedigree.
The duty of an organization towards the society, is to make available goods and services, in which it has expertise in the best form in terms of price and quality to the society. It is during the pursuance of this selfish motive of earning profit by providing goods and services, that an organization fulfills its duty towards the society. It is also through the taxes it pays the government, which is responsible for social and economic upliftment of the society. It need not indulge in direct upliftment of society through philanthropic projects. It would be an unjustice to the stakeholders (shareholders included) to have their resources divested in areas not yielding profits. Instead, that money should be invested for furthering business prospects.
There has been a growing parade of top-notch billionaires in US, who undertake CSR intiatives by “their” own share of money, and hence the impact of such activities does not reflect in their organization books. Warren Buffet, Rockfeller, Gates being the prominent examples of such philanthropic pursuits.
Of late, some marketing gurus, have linked CSR to brand image of a company. Being a novice on the subject yet, I feel too little to question them, but utterly fail to understand any logical equation between CSR and a company’s brand image. Examples are in plenty, but I prefer not to get into that. The point is, even if there is any indirect benefit to an organization through its CSR programmes in terms of brand image building, then its just a form of marketing expenditure by an organization, and no philanthropic trait should be attached to such programmes either by the organization or the media. Such activites should be redefined and be classified as “business as usual” by all concerned.
I wish : Let Business be business, and charity be charity. Multiple hats do not yield optimal value addition. Let there be an utmost clarity of roles between corporate and government, and the tact of fruitful implementation on part of both, to deliver the best to the society.
But alas !...if wishes were horses, men would ride.
But, currently, thanks to a bunch of corporate jokers and mediapersons, a CSR (Corporate Social Responsibility) dimension to business is attached. Almost all organizations in India and abroad do indulge in such CSR initiatives. Such acts of charity by organizations is being taken by one and all in a positive spirit, and hordes of CEOs and MDs, donning the Who’s who list have been talking about “their” CSR activities with pride. Too much an emphasis is nowadays being laid on the CSR aspect of an company, with many organizations including my earlier and current companies, specifically recruiting “experts” for the same. From Sankaralingam to Ratan Tata, Narayanmoorthy to Roongta, from A.M.Naik to Ambanis and even Mallya, all have openly stated their CSR intiatives as a part of “their” duty to pay back to the society.
Should Organizations resort to CSR ? My take : NO, Absolutely NOT.
Most of the intellectuals would dismiss my take as idiotic or foolish, but as I have been many a times accused of both, I do not mind of stating my conviction once again to earn that pedigree.
The duty of an organization towards the society, is to make available goods and services, in which it has expertise in the best form in terms of price and quality to the society. It is during the pursuance of this selfish motive of earning profit by providing goods and services, that an organization fulfills its duty towards the society. It is also through the taxes it pays the government, which is responsible for social and economic upliftment of the society. It need not indulge in direct upliftment of society through philanthropic projects. It would be an unjustice to the stakeholders (shareholders included) to have their resources divested in areas not yielding profits. Instead, that money should be invested for furthering business prospects.
There has been a growing parade of top-notch billionaires in US, who undertake CSR intiatives by “their” own share of money, and hence the impact of such activities does not reflect in their organization books. Warren Buffet, Rockfeller, Gates being the prominent examples of such philanthropic pursuits.
Of late, some marketing gurus, have linked CSR to brand image of a company. Being a novice on the subject yet, I feel too little to question them, but utterly fail to understand any logical equation between CSR and a company’s brand image. Examples are in plenty, but I prefer not to get into that. The point is, even if there is any indirect benefit to an organization through its CSR programmes in terms of brand image building, then its just a form of marketing expenditure by an organization, and no philanthropic trait should be attached to such programmes either by the organization or the media. Such activites should be redefined and be classified as “business as usual” by all concerned.
I wish : Let Business be business, and charity be charity. Multiple hats do not yield optimal value addition. Let there be an utmost clarity of roles between corporate and government, and the tact of fruitful implementation on part of both, to deliver the best to the society.
But alas !...if wishes were horses, men would ride.
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