Consumer Social Responsibility and Consumer

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Consumer Social Responsibility

What is CSR?

CSR is the abbreviation of Corporate Social Responsibility. Corporate Social Responsibility means the obligations to take those decisions and perform such actions which are desirable in terms of the objectives and values of society. This binds companies and organisations that sell goods and services.

The responsibility towards consumers that Corporate Social Responsibility includes is as follows:

  • To provide goods of standard quality
  • To charge fair prices
  • To provide prompt and courteous after sale services
  • To handle consumer complaints and grievances quickly
  • To avoid unfair trade practices like adulteration, black marketing and hoarding.

The responsibility towards workers that Corporate Social Responsibility includes is as follows:

  • To provide fair and regular wages
  • To provide good working conditions
  • To ensure welfare facilities like housing, medical, social security, etc.
  • To provide with opportunities for growth and development
  • To adopt objective (fair) performance appraisal system.

The responsibility towards the Government that Corporate Social Responsibility includes is as follows:

  • To abide by the laws of the land
  • To pay fares and duties regularly
  • To refrain from corrupting public servants.

This is Corporate Social Responsibility.

Illustrations

  • A company sets up a system of free education for underprivileged students.
  • An organisation starts a scheme where the employees are free to indulge in recreational activities.
  • A company starts a scheme for charity out of annual profits.
  • An organisation switches to using the biodegradable material for their products.

Prominent Corporate Social Responsibility Practices by Big Companies

  • Mahindra Group’s project “Nanhi Kali” focuses on educating the girl child.
  • Disney supports the conservation of the environment. It has protected the coral reefs and has planted over three million trees.
  • Maruti Suzuki encourages community development. Village development is done by construction of toilets, upgrading Government schools and so on.
  • Colgate Palmolive has advocated dental health by distributing free health care packs and samples.
  • Infosys has provided schools with computers and has helped build 60000 libraries and toilets.

Corporate Social Responsibility and Consumer

CSR is a strategy of the selling company to attract consumers. CSR has a close connection with consumers. In fact, organisations that indulge in CSR have a more secure growth, development and profit margin.Consumers too receive great assistance from CSR. This has been discussed below:

  • Community Development: A country like India is still in its developing phase. There are multiple villages and slums sprawling across acres of land where people live a life too deplorable for the privileged to witness. With not more than the basic amenities of life, communities living in such areas find it extremely difficult to survive. Here, CSR comes into the picture and helps these poor consumers to uplift their standard of life.
  • Fair Pricing: CSR focuses on fair treatment of consumers which includes pricing. The price of a commodity is determined according to the affordability especially in the case of necessities, as emphasised by CSR.
  • Quality: Another focus of CSR is the quality of goods. Goods prescribing to the predetermined standards of quality are sent out to be sold hence ensuring the safety of the consumers.
  • After Sale: After sale services are extremely satisfying to consumers as they can voice their feedback and grievances, with an assurance that the selling company is willing to make changes accordingly. A prompt and efficient after sale service is sought after and of great help to consumers.
  • Unfair Practices: A hindrance to the protection of consumers has always been unfair trade practices. The Consumer Protection Act, 1986 has made a specific provision for such practices, Sec 2(1)(r). CSR policies often include a strict deterrent when it comes to unfair trade practices, in turn ensuring the consumer’s protection.
  • Social Change: Various feminist movements are begun in the name of CSR. Goods are distributed to consumers to promote urbanisation. Awareness of consumer protection is also spread which makes the society more developed.

These are the prominent ways in which consumers are developed via CSR, hence making it a crucial aspect of Consumer Protection.

There are benefits of CSR to the organisations as well which encourages them to indulge in such activities. These benefits are as follows:

  • Attracting Customers: CSR schemes attract a lot of consumers as information of CSR passes around quick, especially when samples are distributed. This attracts customers who tend to purchase the product in order to test it. This increases immediate sales by a great margin.
  • Consumer Loyalty: By indulging in CSR, companies enhance their image in the eyes of their consumers. This results in the consumers preference becoming stagnant which builds consumer loyalty.
  • Brand Image: A brand image of the product and the company is built. A positive perception of the brand develops in the minds of the consumers. Hence a strong brand image is formed.
  • Profit: Due to an increased number of consumers of the company’s products and less negative changes in the consumption pattern of the product, the company receives an increased share of profit. This can enable the company to expand and grow.
  • Market Share: All the above factors result in the selling company’s product becoming a dominating player in the market, holding a greater market share over its competitors.

Reason Why Corporate Social Responsibility Exists

Corporate Social Responsibility exists among companies for reasons greater than the benefits received by the companies by indulging in such activities. There is a moral aspect to Corporate Social Responsibility which is the guiding force for the development of CSR to its level today. Since a company uses the social resources of a particular region, it is a part of society. Hence, it is only justified that the company gives back to the society that it is a part of and convert the raw material extracted by the society for societal benefit. This is the main reason for the existence of Corporate Social Responsibility among companies.

Frequently Asked Questions (FAQs)

  1. What is hoarding?

Hoarding is an unethical practice followed by certain sellers where they accumulate the goods they produce in order to create a shortage of goods in the market. Shortage leads to a price rise thus increasing their profits if they sell the product at a higher price.

  1. What does After Sale Service include?

After sale services mainly include customer care services. This can be in the form of phone numbers or emails which the consumers can use to reach out to the seller.

  1. Which companies indulge in Corporate Social Responsibility?

Corporate Social Responsibility is indulged in by most prominent companies, example, Tata, Microsoft, Apple and Sony.

 Edited by – Sakshi Agarwal

Quality Check – Ankita Jha

Approved & Published by –  Sakshi Raje