CSR and Corporate Image building

The potential of using Corporate Social Responsibility for a positive image and brand building is being judiciously capitalized by the companies. Investing in CSR may not directly lead to an increase in the bottom-line, but nonetheless it can surely aid in forming a positive perception about the company among the masses. For the image building exercise, there are multiple ways at company’s disposal, but choosing the most appropriate path that is in synergy with business goal and corporate image building, becomes a subject of strategic decision.

One common approach of using CSR in corporate image building exercise is to follow inside out influence on society. This strategy focuses on creating a positive image from the primary or the core activities which the company carries out. For example, fair procurement price, safe products, truthful marketing, respectable labour practices come under this categoryⁱ . A committed effort is also placed on saving the environment from adverse effects of company operations. Even the end products (e.g. automobiles) are publicized in a way to highlight their role in safeguarding the environment. Another approach of utilizing CSR as an instrument for image building is to adopt some social or environmental cause. Some companies like Nestle have used CSR in a holistic way such that it has not only built an image, but also improved its business and benefitted society. Nestle took initiatives to improve the condition of local dairy farmers, which in turn secured the supply of milk and improved the perception of company as being socially responsible.

Enhancing reputation through CSR activities can help in brand building and attracting more business. A positive perception about the company can help in securing the deals with new partners, investors and regulatory authorities. Additionally, it also helps in rapport building with the customers and the employees. A considerable number of customers prefer to avail services from those companies who demonstrate responsible business. Furthermore, the advantage of attracting and retaining talent also depends on the candidate’s perception of company brand, which is partially determined by the social and ethical practices of the company.

Keeping these views in mind, a whole new idea of CSR risk management has evolved. This branch deals with the present and future CSR risks, which might affect a company in terms of tarnishing its reputation, creating political controversies and disrupting its supply chains.

The ethical business has caught up a new sensation in the market place and media plays a powerful role in building or ruining the corporate image. Reports such as use of child labour in manufacturing of branded shoes, or traces of pesticides found in the soft drinks do take a toll on company’s reputation and market share. The firms have started utilizing media as a tool for publicizing their positive steps taken for welfare of the society, business and environment, thus improving their market opportunities.

However, it also means emphasizing in popular and visible corporate activities that may be purely for seeking media attention or building public relations.

CSR, if used strategically can be utilized for a positive image building and business development. Company needs to meticulously plan out their strategy in such a way that the image building exercise does not compromise the core social and environmental responsibility, which is the crux of CSR.

- Randhir Kumar (views expressed in the article are that of the author)