CSR work in HLL. Review on General Thoughts on Management

THE BOOMERANG EFFECTS OF CORPORATE SOCIAL RESPONSIBILITY:

CASE OF HLL

This article was published in the Gitam Journal of Management dated July-Dec 2004. It is written by Mr. Basant Kumar and Mr. S.K. Das. The article talks about the responsibility of a corporate towards the society as a whole. They have taken the case of how HLL has committed itself wholeheartedly to it’s goals towards the society which has in turn helped them gain trust, faith and confidence from the society.

Corporate Social Responsibility or generally termed as CSR is gaining more and more importance in today’s scenario. The growing demand of corporate governance is one of the many factors that have led the businesses to redirect their focus towards CSR. The concept has become so important that it determines the values the companies hold in the eyes of the society. But what exactly is this CSR? Why is it a do or die situation for a business? And how does it determine the value of a firm?

Corporate Social Responsibility is about how companies manage the business processes to produce an overall positive impact on society. It talks about corporate ethics, values and standards. While talking of corporate ethics we can’t forget what Mahatma Gandhi had said, “Commerce without morality is a sin and a social evil” or what Henry Ford’s business philosophy stated, “Organisations are going to receive financial returns in the long run only by assuming social responsibilities.”

In a traditional economy social responsibility was restricted to act just as an extension of a financial input for humanitarian cause. However, the contemporary context of CSR is far more elaborate and complex in nature. The emerging concept of social responsibility focuses on responsibilities towards the stakeholders and not just an act of charity. The stakeholders are all those people who are directly or indirectly involved and affected by the business processes. It would completely be wrong to say that CSR is just confined to small or multinational companies, it is as important as preparation of accounts of a firm.

At the end of the day it is all about giving back to the society. It effectively contributes towards the building of reputation, a competitive advantage.

Although the level of awareness of CSR is limited in India, but post liberalisation more Indian companies focus on CSR and transfer as much as 0-15% of profits towards it.

And one such Indian company that is actively carrying CSR as a part of their business activity is Hindustan Lever Limited.

CSR in HLL

116 years old HLL, subsidiary of Anglo-Dutch giant Unilever, has been conferred with the “Good Corporate Citizen Award”, for the year 2000-01.This achievement is due to the highest standards of corporate behaviour HLL provides to its stakeholders.

Its interaction with the society is carried out through a three fold programme – the company’s direct operations, its indirect operations through the value chain and through its voluntary contributions. HLL believes that the very act of doing business comes with an additional baggage of being socially responsible, and in a long run that baggage will act as the sole thing that distinguishes you from your competitors.

The social obligations that Hindustan Lever fulfils by the means of the following projects:-

(a) Asha Daan, (b) Rural Education Programme(c) Ankur Centre for Special Education(d) Centre for special help to handicapped(e) Community Development Programme

(f) Sankar Eye Society(g) Helping the spastics Society of Bangalore.

Further more examples to explain the magnitude to which HLL’s social responsibilities has had an impact on the society as well the economy.

Creating Rural Entrepreneurs

Promoting hygiene and development

Improving animal husbandry

Boosting Incomes

Promoting agriculture as a business

Water conservation Programme

Dealing with Environmental Issues

CORPORATE GOVERNANCE –

Corporate Governance combines all the responsibilities that a company has towards the society and maintaining a balance between them so that all the parties’ interests are well taken care of. HLL has blended all its players for good governance in its pursuit of excellence and growth. They have created a culture of values consisting of TRUTH, COURAGE, ACTION and CARING nurtured on the principles of transparency, trust, accountability and responsibility.

There is no doubt of why HLL is perceived to be one of the best governed companies and how their ethics and stakeholder relations have a positive impact on their wealth creation and reputation.

Conclusion

Corporate Social Responsibility becomes an integral part of the wealth creation process and whichever company wants to move ahead with time has to adopt it as a serious business process. One thing is for sure, in time to come, the importance of CSR is going to grow more. It will act as a sensible move for any company to instill, build and enhance the trust the society has for them.

The analysis of HLL, suggest that sustainable development requires the combination of economic wealth, environment protection and social well-being. The rising importance of corporate governance has led to the companies to achieve a balance between business and ethics i.e. between profits and responsibility. At the end of the day, the efforts undertaken by the companies will come back to them as trust and faith from the society.

BY:-

NITHYA RANGANATHAN