The Effect of Corporate Social Responsibility on Brand Image- A Conceptual framework

Authors: Bhavna Prajapati, Shraddha Mishra

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Abstract

Corporate Social Responsibility refers to the actions of the companies towards their communities, social causes and the environment. Many firms engage in socially responsible behavior as a part of their normal business operations. These activities include positive action towards the environment, social causes and communities. This paper proposes a conceptual framework which explains how Corporate Social Responsibility contributes towards creation of better brand image amongst consumers. More firms today are beginning to realize the importance of Corporate Social Responsibility and its impact on societal well being apart from their overall processes. Corporate Social Responsibility is a multidimensional subject and for the purpose of this study the Corporate Social Responsibility aspects includes employees, ethics, economic and legal factors. These factors are explored to determine if there is any effect of CSR on brand image. This study has made an attempt to find out whether the consumers awareness towards the CSR activities undertaken by the organization contributes towards the brand image of the organization.

Introduction

Corporate Social Responsibility is a concept that has attracted worldwide attention and acquired a new resonance in global economy. The globalization has given way to tremendous opportunities and has also opened door for countries across the globe. In 1953 Bowen wrote the seminal book Social responsibilities of the Businessman. Since then there has been a shift in terminology from the social responsibility of business to corporate social responsibility. This field has grown significantly and today contains a great proliferation of theories, approaches and terminologies. Society and Business, Social issues management, Public policy and Business, Stakeholder management, Corporate accountability are just some of the terms used to describe the phenomenon related to corporate responsibility in society. Corporate Social Responsibility allows for corporations to take as a role in the society, to play the guardian and to show it cares. There are evidences which show that the consumers buy brands that reflect their own values. Thus it is very important that the organization should not overlook the impact of their social responsibility efforts. Building a brand image through Corporate Social Responsibility not just refers to opening a checkbook rather it is about starting with a value oriented philosophy as the foundation blocks of a brand. Brand image is a reflection of quality, price, service and attributes of a product that helps to distinguish one product from another. All these are the factors that make a brand more appealing and influencing to consumers. Well as this is an era of digitalization and as a result of advance technology and information, the customers often explore other factors aiding their purchase decisions. Many organizations in India too have started drawing CSR policies and practices. Corporate social responsibility (CSR) has found place on the board agenda since the Companies Act 2013 was enacted. Before CSR was made mandatory, companies did try and push back. Many argued that the government is abdicating its “social responsibilities” and inserting the provision regarding CSR spend reflected government failure. Others went on to argue that the government should drop the provision, and increase corporate tax by the equivalent two per cent—after all, the business of business is business and such pastimes do not fit into the business plan. Corporate India's social responsibility graph is headed up with 47 per cent jump in CSR spend since it became mandatory, with 300 BSE listed companies spending Rs 6,871 crore on this front in 2016-17, says a report.

Conclusion

This paper tries to put forth the idea that CSR can indeed be used as a tool to create a positive brand image by Indian organizations. This area is certainly worthy of research as many Indian organizations are beginning to practice CSR on the premise that socially responsible corporate activity is an important source of competitive advantage to the degree that it enhances their overall reputation and credibility. It is hoped that this study will be of value both to those concerned about society and those concerned about showing the highest responsibility towards the people from whom they make profits. The author proposes the need to conduct an empirical study in order to validate the research framework proposed above. A research involving Indian organizations that are fast jumping the CSR bandwagon and real consumers could prove beneficial in uncovering truths about CSR and its effectiveness in enhancing brand image. In addition, if there is indeed a positive and strong relationship between corporate social responsibility and brand image, this will serve to convince businesses that social responsibility is an important construct in decision making. Clearly research in this field is needed, more so these days as societies and industries are merged through globalization and people are becoming highly literate and aware about their rights. Since CSR is slowly gaining momentum in India and given a different context, a strong business case must be made. There is a need to prove conclusively if indeed CSR practices are correlated to brand image so as to convince organizations about the potential benefits of CSR not just for the society but also for the organization in the long run.