Asian Journal

Asian Research Consortium of Research in

Business Economics
and
Asian Journal of Research in Business Economics and Management
Vol. 6, No. 4, April 2016, pp. 1-8. Management
ISSN 2249-7307 www.aijsh.com
A Journal Indexed in Indian Citation Index

Brand Building through Corporate Social Responsibility;

an Indian Scenario

Jinu Mathew*; P C Dhanuraj**; Suresh T.S.***

*Assistant Professor,
Research and PG Department of Commerce,
St Thomas College,
Pala.
**Guest Lecturer,
Research and PG Department of Commerce,
St Thomas College,
Pala.
***Student,
Research and PG Department of Commerce,
St Thomas College,
Pala.
DOI NUMBER-10.5958/2249-7307.2016.00029.3

Abstract
CSR activities refer to the initiatives of an individual corporate entity undertakes as an extra effort
for the welfare of the society and environment as a whole. This initiative is a kind of gratitude
shown by the companies towards the society from whom they earn profits. Companies can build
sustainable brand image by emphasizing on social, economic and environmental problems of the
society. Customers will perceive such organisation as socially conscious organisation. This study
describes about the concepts of CSR and relationship between the CSR activities and brand
building. Companies like Tata Steel, ITC and Mahindra & Mahindra are taking various steps to
build their brand image, keeping in mind social responsibility of company. This paper suggests that
companies should build their brand image through socially responsible efforts, because the long
term benefits are higher than risks and costs of CSR. This study suggests that companies can face
the competition by widening the CSR activities.

Keywords: Corporate Social Responsibility (CSR); Brand Image; Indian Companies; Business
Performance.

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Introduction
Corporate social responsibility (CSR) is receiving increasing attention, especially in recent decades.
CSR is a management concept whereby companies integrate social and environmental concerns in
their business operations and interactions with their stakeholders. CSR is generally understood as
being the way through which a company achieves a balance of economic, environmental and social
imperatives while at the same time addressing the expectations of shareholders and stakeholders.
Different concerns define Corporate Social Responsibility differently. World Business Council for
Sustainable Development defines Corporate Social Responsibility as “The continuing commitment
by business to behave ethically and contribute to economic development while improving the
quality of life of the workforce and their families as well as of the local community and society at
large.”Jamshedji Tata has very beautifully defined the Corporate Social Responsibility as “The
clear definition of Corporate Social Responsibility is that the community is not just another
stakeholder in our business but the very purpose of our existence.”

Corporate social responsibility is not a new issue. The social responsibility of business was not
widely considered to be a significant problem from Adam Smith‟s time to the Great Depression..
The concept of CSR originated in the 1950‟s in the USA and the concept came into prominence in
public debate during the 1960‟s and 1970‟s. During the 1980‟s to 2000, corporations generally
recognized a responsibility towards society and weighed against the demands of being competitive
in a rapidly changing global economy. The Social Responsibility cannot be understood without an
examination of the nature of corporations and their objectives. More than 50 percent of global
executives identify CSR as their top priority (The Economist, 2008). The implementation of a CSR
policy may generate a trusting relation-ship between the company and the stakeholders which will
result in customer loyalty (Garbarino& Johnson, 1999; Maignan& Ferrell, 2004; Sen, Bhattacharya,
&Korschun, 2006).

Rationale of the Study

Corporate social responsibility has become a common word in recent years and it is highly debated
topic among the researchers and scholars. In recent years, with industrial development and social
progress, issues of corporate social responsibility (CSR) have been receiving increased public
attention. By way of contributing to the well-being of society, enterprises have striven to present
good business images, and consumers no longer tend to seriously examine corporate feedback to
society (Esrock&Leichty, 1998; Goi& Yong, 2009; Alsmadi&Alnawas, 2012). There are two
reasons why CSR is getting more attention: firstly, enterprises understand that CSR is a key to
business success, and secondly, nonprofit organizations need support, and this encourages
enterprises to participate in the social wellbeing activities.(Lichtenstein, Drumwright, &Braig,
2004). Furthermore, most enterprises believe that carrying out CSR can make themselves
recognizable to the public (Kotler& Lee, 2005), because undertaking social responsibilities allows a
company to build good images and a good reputation (Fombrun&Shanley, 1990;
Giannarakis&Theotokas, 2011). Therefore, a company carrying out its policy of social
responsibility can enhance its good image and create a competitive edge (Porter & Kramer, 2006;
Boonpattarakan, 2012).In fact, CSR and corporate brand images are actually inextricably bound,
but there are very few studies on the related topics. This is one of the motives for this research.

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Scope of the Study

Scope of the study is limited to study concept of CSR and mostly focusing on the different CSR
activities carried out by selected Indian Companies.

Objectives of the Study

The objectives of the present study are;

a. To understand the concept of CSR and its relevance.

b. To know the CSR status in India.

c. To know the CSR practices adopted by Indian Companies.

Research Methodology
The present work is based on the secondary information collected from the vivid resources
concerning to the corporate social responsibility and Brand Image. The information is collected
from libraries, journals, magazines and online sources.

The Evolution and History of Corporate Social Responsibility

The concept of corporate social responsibility is not brand new; however it has evolved
considerably in the last few decades since the phrase corporate social responsibility was coined in
1953 with the publication of „Social Responsibility of Businessmen‟ by Howard R. Bowen. The
phrase has been in wide use since the 1960‟s and through the 70‟s and 80‟ discussion of the concept
grew. Around the same time, big international companies also faced anti-corporate sentiments
because of environmental and human rights issues. In fact, companies faced large scale boycotts of
their goods and services to force change.

The first company to implement CSR was Shell in 1998. Though initially CSR was seen as the
moral responsibility of corporate managers, it is now increasingly being accepted as being in the
long term interest of corporations. Organisations as well as consumers are recognising that
companies have a responsibility not only to their shareholders, but also to stakeholders including
their employees, consumers, suppliers, communities, legislators and the environment. CSR now
represents an organisations contribution to these stakeholders, the society at large and increasingly
the global society in which they operate.

Corporate Social Responsibility (CSR) In India

India has a long rich history of close business involvement in social causes for national
development. In India, CSR is known from ancient time as social duty or charity, which through
different ages is changing its nature in broader aspect, now generally known as CSR. From the
origin of business, which leads towards excess wealth, social and environmental issues have deep
roots in the history of business. India has had a long tradition of corporate philanthropy and
industrial welfare has been put to practice since late 1800s.Business practices in the 1900s that

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could be termed socially responsible took different forms: philanthropic donations to charity,
service to the community, enhancing employee welfare and promoting religious conduct. The
ideology of CSR in the 1950s was primarily based on an assumption of the obligation of business to
society.

In initial years there was little documentation of social responsibility initiatives in India. Since then
there is a growing realization towards contribution to social activities globally with a desire to
improve the immediate environment (Shinde, 2005). It has also been found that to a growing degree
companies that pay genuine attention to the principles of socially responsible behavior are also
favored by the public and preferred for their goods and services. This has given rise to the concept
of CSR in India.

Today Indian companies are facing competition from multinationals who are offering identical
services in their own backyard. One of the way through which Indian companies can face this
competition is just by widening the CSR activities of their firms. Thus there is a significant rise in
the need of CSR performances in India. The range of culture, language and environment can only
be crossed with being proficient and ahead with Corporate Social Responsibilities.

In India, the concept of CSR is governed by clause 135 of the Companies Act, 2013, which was
passed by both Houses of the Parliament, and had received the assent of the President of India on
29 August 2013. The CSR provisions within the Act is applicable to companies with an annual
turnover of 1,000 crore INR and more, or a net worth of 500 crore INR and more, or a net profit of
five crore INR and more. The new rules, which will be applicable from the fiscal year 2014-15
onwards, also require companies to set-up a CSR committee consisting of their board members,
including at least one independent director. The Act encourages companies to spend at least 2% of
their average net profit in the previous three years on CSR activities.

Brand Image
A good brand can confirm a consumer‟s favorable impression, and enhance his/her recognition of
the products (Grewal& Krishnan, 1998). When a brand image is strong in a consumer's mind, the
products can easily obtain greater attraction.(Shamma& Hassan, 2011). Park, Jaworski and
Maclnnis (1986) argued that brand image is a perceptual phenomenon affected by corporate
communication activities, by means of which consumers can be led to freely associate their minds
to the branded products.

Brand equity entails “the additional value that accrues to a firm because of the presence of the
brand name that would not accrue to an equivalent unbranded product” (Keller and Lehmann, 2006,
p. 745). Despite the interrelation between reputation and brand, the two concepts are not
synonymous. Reputation centers primarily on the company, whereas brand is customer-oriented
(Ettenson and Knowles, 2008). Reputation may create a favorable context for product evaluation
but is not a sufficient condition for brand value enhancement.

Branding is used to differentiate one product or service from another using a symbol, name or
design (Pride et al., 2006, p.208). Branding can be used for customers to identify a product or
service, making the introduction of new products into the market easier, whilst building brand

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equity, or the value a company can leverage off the brand. More importantly whilst branding makes
it easier for consumers to identify products, it also makes it easier to develop brand loyalty (Pride et
al., 2006, p.209).

CSR Activities in Indian Companies

India ranks 7th among 11 Asian countries conducted by Asian Corporate Governance Association
(ACGA).In June 2008, a survey was carried out by TNS India (a research organization) and the
Times Foundation with the aim of providing an understanding of the role of corporations in CSR.
The findings revealed that over 90 per cent of all major Indian organizations surveyed were
involved in CSR initiatives. In fact, the private sector was more involved in CSR activities than the
public and government sectors. The leading areas that corporations were involved in were
livelihood promotion, education, health, environment, and women's empowerment. Most of CSR
ventures were done as internal projects while a small proportion were as direct financial support to
voluntary organizations or communities.

CSR and branding have a number of linkages, specifically through trust, corporate reputation and
consumer attribution. Gurhan-Canli and Fries (2009) developed a corporate social responsibility
and brand-related outcomes model. Gurhan-Canli and Fries (2009) suggest that both consumer
characteristics, such as awareness of CSR programmes and personal judgment and company
characteristics such as reputation are factors influencing branding outcomes. The branding outcome
would include evaluation of the company, brand and product, in which brand trust would be
considered. Fit between the CSR activities and the company and brand itself also impacts on the
way consumers perceive the CSR activities (Ellen et al., 2000; Yoon et al., 2006). The study
considers some examples of top Indian companies those developed a good brand image in the mind
of consumers through their CSR activities

Tata Steel
Tata Steel is the only Indian company to have pledged to translate the Global Compact principles
on human rights, labor and environment into practice. Over the years, the nature of the company‟s
involvement with the community has undergone a change. It has moved away from charity and
dependence to empowerment and partnership. It comes out with the Human Development Index
(HDI), a composite index of health, education and income levels, to assess the impact of its work in
rural areas. The major CSR initiatives of the Tata Steel Include,

Project MANSI on maternal and new born survival, which is undergoing in 167 villages in
Seraikela district, had been brought down the infant mortality rate by 26.5% from 32.7%.Project
RISHTA on adolescent health was scaled up from Seraikela Kharsawan to other operational areas
of the Company and is now being implemented in 700+ villages across 7 districts in Jharkhand and
Odisha. To provide healthcare services to deprived communities, Tata Steel in partnership with
Hewlett Packard set up an E-health centre at Bagbera in Jamshedpur. Patients are catered to by
doctors sitting at a distant location using real time technology solutions. A fellowship named “ Jyoti
Fellowship” was given to nearly 3,000 meritorious students from the SC/ST communities across
Jharkhand,Chhattisgarh and Odisha The Company partnered with several organisations to set up
skill development centres for IT, hospitality, textile, cosmetology etc. To empower farmers of

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Patamda, a Market Yard was set up in January 2014 to provide options to aggregate and market the
agriculture produce at a fair price. Under the solar street light project, nearly 2,300 solar street
lights were installed in villages of Jharkhand and Odisha. As part of their CSR initiatives they set
up Institutions such as National Institute of Technology, R.D.Tata Technical Education Center, and
SavakNanavati Technical Institute provides technical and job oriented training.

ITC Ltd.
ITC Limited operates in the diversified business sectors of the economy in India. ITC has crafted
innovative business models that create larger and enduring value by not only generating new
sources of competitive advantage for its businesses, but also in the process augmenting natural
capital and sustainable livelihoods for the nation. The major CSR initiatives of the ITC Include, E-
Choupal-The programme involves the installation of computers with Internet access in rural areas
of India to offer farmers up-to-date marketing and agricultural information.4 million farmers
empowered, 6,500 e - Choupals installed

Integrated Agriculture Planning - ITC provides facilities to farmers to form agri-business society,
pool knowledge and rescores improve productivity and quality and reach beyond to local markets
to sell at better rates. 114,428 hectares greened, generating 51.48 million person‟s employment.

Women Empowerment - ITC has organized village women into micro-credit groups. Group
members make monthly contributions to create a savings amount. The amount is used to extend
soft loans to group members, thereby eliminating the stranglehold of the moneylender. The system
of mandatory contribution further strengthens the savings habit, leading to capital augmentation.

Primary Education - ITC t is making significant contributions in its operational areas to ensure
minimization of school drop-outs by providing support to state-run primary schools.A total of 674
supplementary learning centers, up from 71 in 2004-05 were provided extra coaching.1,696
children from poor families received school uniforms, 8,969, text/exercise books, a network of 52
rural libraries and resource centers enriched the process of learning for these children.

Mahindra & Mahindra

At Mahindra & Mahindra, The K. C. Mahindra Education Trust was established in 1953 with the
purpose of promoting education. Its vision is to renovate the lives of people in India through
education and financial assistance across age groups and across income strata. The K. C. Mahindra
Education Trust undertakes a number of education plans, which make a difference to the lives of
worthy students. The Trust has provided more than Rs. 7.5 crore in the form of grants, scholarships
and loans. It promotes education mostly by the way of scholarships. The Nanhi Kali (children)
project has over 3,300 children under it and the company aims to increase the number to 10,000 in
the next two years by reaching out to the underprivileged children, especially in rural areas.

Recommendations for better CSR

Considering the limitations of the companies in their CSR activities, we can make some
recommendations which can be used towards satisfaction of stakeholders.

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 Companies should extend their CSR activities in less privileged states rather than concentrate
in resource rich states.

 It is essential that companies develop an effective value chain system of their products through
their CSR activities, which is essential for competing in the global market.

 It will give better results if activities are based on a more participatory approach and touch the
grassroots level.

 Voluntarism among employees should be encouraged and institutionalised through recognition

and incentives.

 There is also need for public-private partnership with well-defined controls and process for the
best use of resources for social change.

 Participation of small and medium business should be encouraged.

 Experience has shown that working with NGOs is more worthwhile and result-oriented.
Joining hands with related NGOs is therefore advisable.

Conclusion
The concept of corporate social responsibility has gained prominence from all avenues.
Organisations must realize that government alone will not be able to get success in its endeavor to
uplift the downtrodden of society. The present societal marketing concept of companies is
constantly evolving and has given rise to a new concept-Corporate Social Responsibility. Many of
the leading corporations across the world had realised the importance of being associated with
socially relevant causes as a means of promoting their brands.

Today, CSR in India has gone beyond merely charity and donations, and is approached in a more
organized fashion. It has become an integral part of the corporate strategy. Companies have CSR
teams that devise specific policies, strategies and goals for their CSR programs and set aside
budgets to support them. It can be concluded that in today‟s informative world where information
are readily available to general public CSR has been an important part of any organization to be
successful.

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