In the modern business world, CSR and PR concepts have become popular notions with respect to how companies relate with the society in which they operate. These concepts are closely linked because they deal with the public domain that influences their prosperity. Public Relations (PR) refers to ways through which a company creates and sustains a valuable link with the community that has the potential of determining its prosperity or collapse.
Through PR, an organisation strives to maintain a prolonged good rapport with the public to the extent that it (the community) can understand the purpose of its activities and the need to support it. On the other hand, Corporate Social Responsibility (CSR) refers to an organisation’s contribution to the socio-economic and political life of the community that it serves since such a community has the ability to alter its success. Through CSR, an organisation can contribute to society through philanthropic acts, anti-corruption policies, satisfying customer needs, and/or investing in various community-based projects, among other aspects. CSR enables companies to enhance the quality of life of the surrounding community, which in turn benefits it.
In the contemporary age, CSR is quickly developing as a form of public relations that companies that aspire to create good public image should consider. As corporate citizens, companies are expected to respect the law, be ethical, and/or reach out to other ordinary citizens. It is through accomplishing the obligations of a corporate citizen that an organisation attracts investors and consumers (Turker 2009).
The modern firm is a contrast of the traditional firm whereby the ultimate goal of an organisation was to maximise the interests of shareholders. The contemporary view of CSR was non-existent in the past (Vilkė 2014). Consumers and investors are vigilant in the modern market. Thus, they will strive to associate themselves with companies that have a good reputation with respect to their products and their interaction with society. To achieve this good standing, companies need to enact proper CSR and PR programmes. The rapid manifestations of CSR by companies have made it overlap with PR since most companies are opting to initiate CSR programmes (Paul & Siegel 2006).
CSR is often concerned with the external issues that connect the company and the community. Hence, CSR is an appendage of PR. Initially, CSR became popular in developed nations, as they could understand that organisations were fulfilling their responsibility of supporting society. With time, commentators have observed that the role that many companies play is just but another form of PR. Techno Electric and Engineering Company Limited (TEECL), which forms the basis of discussion for this paper, is among the organisations that have dynamically participated in CSR activities. It has allocated about 2% of its revenue. It reaches out to society through various education, wellbeing, as well as livelihood ventures. Using Techno Company as a case study, the discussion in this paper will show that CSR is just another form of PR for companies that wish to get an edge on their competitors.
Case Study: Techno Electric and Engineering Company Limited CSR
TEECL is a dominant player in the field of engineering, procurement, and construction (EPC) service provision in India. Founded in 1963, the company has grown to offer other services, which include plant electrical and illuminations. It joined the power distribution back in 1980 and subsequently begun producing power in 2009. Currently, the organisation merges three prime categories that are EPC, renewable energy production, and construction of transmission connections. The company also boasts of about 200 skilled employees who are accompanied by 150 engineers who have over 25 years job experience, which gives it a good platform to control its industry, even with the rapid development in infrastructure and technology. Furthermore, the company has successfully worked on more than 280 projects, which have enabled it to earn a good reputation in the market.
Despite the challenges that affected India’s economy in 2014 to the extent of trickling down to the power transmission sector, the company was able to record profit, although it was lower than that of 2013 and 2012 periods. The management of the company also believes that the new political regime will help to stabilise the industry, eliminate bottlenecks, and/or create opportunities for more investors (Techno Electric and Engineering Company Limited 2014a).
Although the company has gone through major challenges in the past years, its growth in the industry has been impressive and worth noting. Success can be linked to many factors, such as good marketing, qualified personnel, and quality services. However, the generally good public image that it has maintained over the years is a key factor for its success. TEECL has established and maintained good public relation skills with CSR being seen as an adjunct of PR that the company uses to maintain its clients and/or attract potential customers.
Scholars such as Deegan and Shelly (2014) have championed a four-model definition of CSR that includes financial, legal, moral, and discretionary aspects. Under the economic approach, CSR should have a fiscal benefit, for instance, rewarding employees, reimbursing investors for shares in the business, and encouraging technological developments and generation of new products. The legal aspect of CSR refers to an organisation that adheres to the laws of the market and its environment. This conformity is then accompanied by the moral expectation that an organisation will have to meet certain ethical standards through CSR as expected by society. The discretionary aspect of CSR allows organisations to make a variety of judgment and opinions (Deegan & Shelly, 2014).
According to Chernev and Blair (2015), the application of CSR has been intensified in contemporary organisations than in traditional firms because of the notions that have been adopted over the years. In the past, traditional firms concentrated on maximising the shareholders’ interest. However, after the Second World War, a great interest arose concerning the role of businesses towards their environment, which would later emerge as a common good. Firms began reaching out the society. As consumers became more vigilant, CSR was more of what the society wanted, rather than what the company wanted to do to society.
Similarly, PR encourages the creation and implementation of socially acceptable ideologies. Moreover, just like PR, CSR strives to establish an appealing reputation of the company to the society with the assumption that if the company impresses the public, the environment will absorb it, thus earning it more investors, customers, and any information that can give it a competitive advantage over its clients (Kitzmueller & Shimshack 2012). Moreover, both PR and CSR employ an open system technique since the organisation interacts with the community in a way that it receives feedback about its efforts (Jones 2010).
TEECL and its affiliate companies have progressively participated in CSR activities. For instance, it allocates about 2% of its budget to CSR projects. Its charitable organ, namely Oriental Charitable Foundation, actualises most of its CSR projects. Through this arm, the company has accomplished several projects that have improved the quality of life of most Indians. By considering the various aspects of CSR as advocated by most scholars such as Cheng, Ioannou, and Serafeim (2014), TEECL has categorised its CSR programmes into various groups, which include education, healthcare, and livelihood. To implement its education projects, the company has deployed three non-governmental organisations (NGOs) to manage the implementation plan (Parker 2011).
The NGOs include Akshaya Patra Foundation, Friends of Tribal Society, and Utsarga Charity. The NGOs operate parallel programmes, all of which intend to attain the prime purpose of imparting knowledge to more Indians through TEECL (Techno Electric and Engineering Company Limited 2014b).
Akshaya Patra Foundation was established in 2000 with the aim of ensuring that hunger would not tamper children’s schooling. Statistical findings indicate that about 50% of pupils enrolled in the first level quit school by the time they get to the last level (Techno Electric and Engineering Company Limited 2014a). This observation is alarming upon considering the fact that half of India’s population is made up of youngsters who are not above the age of 25.
The high rate of school dropout is likely to affect the future of India if no mitigation measures are taken. Commentators have also noticed how this drop out is prominent because of hunger and poverty that most Indians are languishing in (Cheng, Ioannou, & Serafeim 2014). These observations inspired the creation of the Akshaya Patra Foundation to provide free meals to schoolchildren. Over the past decades, India has witnessed a steady improvement in school enrolment, class attendance, as well as academic results. Thus, the foundation has made progress in accomplishing its mission of ensuring that hunger does not impede children from going to school (Techno Electric and Engineering Company Limited 2014b).
However, Akshaya Patra could not have witnessed success without the moral and monetary support of various organisations such as TEECL. Out of the 13million children that the foundation feeds, TEECL has so far agreed to support children in 60 schools. Indeed, this number is huge and that the foundation cannot feed it in the absence of the company. The role of TEECL in this programme continues to change several lives across India.
According to Techno Electric and Engineering Company Limited (2014a), another organisation that TEECL has closely worked with to accomplish its CSR goal of providing education is Friends of Tribal Society (FTS). FTS strives to promote basic education to impoverished communities. It upholds the idea that literacy will help the country to progress. TEECL has worked closely with the organisation that is currently running ten schools. Moreover, TEECL also works with Utsarga Charity, which is a non-governmental organisation that is committed to offering schooling, art, and computer classes for poor children.
In the health sector, TEECL has initiated various health programmes that are meant to enhance the quality of life for the surrounding community. It has closely worked with the Lions Club of Howrah Trust to create an eye health centre to offer treatment to people who suffer various eye ailments. The company has also supplied the hospital with adequate resources and proper power supply to ensure that patients receive quality treatment. Furthermore, through the Umrao Institute of Medical Science and Research Trust, TEECL covers medical expenses for over 250 patients annually.
Furthermore, TEECL has also diversified its CSR programme to include livelihood projects. It has implemented these life-changing projects through funding various organisations that provide technical education. Besides financing women, it has also offered volunteer services in countryside regions to educate people in family planning, among other issues. Among the main organisations that help to accomplish these goals is Gian Sagar Group of Institute that offers career opportunities to marginalised groups such as women and poor communities. The institute also offers vocational training, as well as health services.
It is evident that TEECL participates actively in CSR and that it is still committed to improving how it interacts with its external environment. The company is committed to introducing CSR policies that will help in managing CSR programmes because of the good image that they portray to the public about the organisation. By improving the lifestyle of Indians through the provision of their basic needs, the company earns stakeholders and customer confidence.
The CSR programmes that TEECL establishes and implements through the various organisations are similar to PR programmes whereby companies strive to maintain a moral link with investors and the society that they serve (de Colle, Henriques, & Sarasvathy 2014). Just like CSR, PR creates a symbiotic link between the society and the business since the two concepts flourish from each other (Cheng, Ioannou & Serafeim 2014).
Hence, CSR, as an adjunct of PR, is expected to act as a corporate citizen. By being a corporate citizen, the company interacts with the society in a mutual way as evidenced by TEECL CSR projects. As a corporate citizen, TEECL has initiated programmes to educate and provide medical care for ordinary citizens, particularly those who are impoverished. Through this corporate citizenship act, the company creates harmony with stakeholders (Joseph 2009). Confirming this assertion, Bénabou, and Tirole (2010) demonstrate how this social cohesion builds the confidence of an organisation before the public.
Commentators have observed how consumers prefer to deal with companies that reach out to the community. Such a move helps firms to win and keep clients because of a good relationship. Besides winning investors, it also enables firms to earn publicity, which eventually helps them to maintain a competitive advantage. CSR also makes it easier for organisations to initiate change, as a good relationship with society helps it to understand the emerging tendencies and thus incorporate them when planning a change in the organisation. It also enhances innovation and creativity. In fact, when the company interacts with CSR, it gets a lot of information from the society that can enable it to develop new ideas (Rupp 2006).
CSR has helped TEECL to create a good rapport with the society. The situation has made it appear as if it is granted a ‘social license’ to function in the area. In essence, CSR creates a positive reputation for the company, thus establishing an opportunity for an organisation to enjoy all the benefits. Proper PR also leads to similar benefits as those of CSR (Kim & Park 2011).
Despite the prominence of CSR, most companies lack a well-established CSR management team. For instance, despite having brilliant CSR programmes, TEECL does not have clear policies that can help in the implementation of the programmes. Most of its charitable programmes are managed by other non-governmental organisations. Since growth is anticipated to remain consistent, companies should strive to create departments that can monitor such programmes. Currently, PR departments manage most CSR initiatives (Remišová & Búciová, 2012).
CSR is an appendage of PR. The latter is a phenomenon that entails the efforts that organisations take to establish and maintain a good reputation with the public. CSR is closely linked to PR because the programmes under CSR help in creating a symbiotic relationship between an organisation and the society. TEECL has actively participated in CSR initiatives by implementing various projects that are meant to improve the life of Indians and in particular the impoverished citizens. Through its charitable activities, TEECL has been able to earn a good name that has in turn helped it to attract and retain investors and customers. The company went ahead to record profits even in a period when India was facing an economic crisis while the power generation sector was facing numerous hitches. TEECL is still a dominant player in the EPC industry.
In fact, it is expected to continue expanding its list of services. Its immense success in the industry can be largely associated with its commitment to serving the society where it operates. CSR is a rapidly growing phenomenon that needs more research so that companies can understand its link with PR and if it can be a replacement for PR or if the concepts can operate in unity (Schmeltz 2014). Even as more studies are being conducted to understand CSR, companies must consider it as an essential tool in an organisation that requires clear policies on how it is implemented.
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