Sunny Shrestha MBA - IV Social Responsibility Activities Why do it? Lets envision the life of a tree.

. It grows in a certain area of land, absorbing all the required nutrition from the soil. So what is there for the soil? How does the soil benefit? Does the soil get any better of? The answer is a definite Yes! The tree protects the soil from being eroded and also helps in retaining moisture. From this picture what I attempt to present is the symbiotic relationship that is in existence. The tree represents any organisation and the soil represents the society. An organisation grows within a society, extracts benefits from it, and is also responsible to give something back to where it has flourished. So why is it important that an organisation needs to give something back to the society? The answer is quite simple because the society is the source of all the resources required for the prosperity of any organisation. However, this is not the ultimate cause. Any organisations socially responsible activities if used carefully, can act as a tool to enhance the shareholders wealth of that organisation. Corporate Social Responsibility (CSR) activities create a positive image of the organisation in the market and thus luring more resources into its business activities. Furthermore, CSR activities can act as a very cheap, yet effective alternative to advertising. While a company may spend millions of Rupees for advertising its brands, a simple gesture of CSR activity like sponsoring a child until the completion of his/her secondary education - when covered by various media can have a huge impact in creating brand awareness at a very negligible cost. To explain further about the implications of CSR activities in a business, we can refer to a tool developed by Dean Roger Martin called the Virtue Matrix. This tool illustrates four main reasons to why a firm could opt for CSR activities viz. strategic frontier, structural frontier, choice, and compliance. The strategic frontier comprises of such activities that enhances the shareholders value. Companies can incorporate CSR activities in their strategy to earn profit. The structural frontier on the other hand comprises of such activities which benefit the society rather than enhancing profit. So, companies may opt for carrying out CSR activities without seeking anything in return with a true humanitarian feeling. Choice refers to such activities which the organisations carry perform as per the on-going customs and traditions but is not compulsory. And finally, compliance consists of such activities which are legally binding. A company must perform such tasks which fall under compliance. Therefore, we can now see various reasons to why a firm needs to act socially responsible. It could be because the firm respects human values, or maybe it is being forced (legally) to do so. Whatever may the reason be, such activities are not just expenses to the company. It does have a certain payback. After all, we are serving our own kind and who can better understand us than us?