The misnomer that was missed

2009-07-17T22:42:00.000+05:30

I was not much aware of the term Corporate Social Responsibility until recently when this term was discussed in one of the forums of interaction in our company. I was searching for a blog post topic when this term stuck me as appropriate for my next post.

So, what is Corporate Social Responsibility (CSR)? Wikipedia defines it as “the deliberate inclusion of public interest into corporate decision making”. This definition was somewhat misleading – I felt that this definition was not exactly correct. The reasons? Read on.

Can any corporation live for the sake of the society? What then is the rationale behind the pooling in of money, effort and technology to develop products/services? If corporations were to survive only for the sake of society, if each of their decisions were based on public interest, why should they be owned by private entities? Why not they renounce their control to the government and make it a charitable trust? Such questions flooded my mind before the next question provided the much needed direction – is the term corporate social responsibility a misnomer?

Yes – that was my immediate answer. Pat came the next question – why is it a misnomer? To satisfy my insatiable brain, I tried to define the need for the existence of a corporation:

A corporation exists to create quality products/services and thereby yield profit and return on its investment
A corporation exists to create value for the product and as a corollary to create value for the money used to purchase that product

I further analysed each of the above points in detail. Here are my musings:

Quality products are not produced for the sake of public but for the sake of common sense – if the product is not a quality product, then no one will buy it and the corporation cannot survive
Value is created by the quality of the product. I do not want to delve deep in to the economic considerations such as the effect of value and quality on inflation but I can support this observation with a simple example: consider that a customer wants to buy a car. Typically, he will do some research on what car will meet his requirements – the car must be spacious enough for his family, it must deliver good mileage, it must fit within his budget, etc. After short listing a few cars, he will choose and buy the one that offers him the highest value for his money.

Coming back to the main question: why CSR is a misnomer? Paradoxically, a corporation should be “socially responsible” for its own sake. Creation of value by using quality can either be interpreted as social responsibility or selfishness. This partly explains why I consider the term CSR a misnomer. But, is creation of value the professed ideals of a company's CSR policy? Unfortunately, no! In my opinion (at least!), most organisations that claim to be socially responsible are missing a point by not realising the true meaning of social responsibility. For example, consider a company that claims to be socially responsible by planting trees, organising blood donation camps, etc. These activities are not wrong but to claim that the company is socially responsible for these reasons is what is not correct. These might be socially responsible acts, but the company's existence does not require it to involve in such acts. I am not against an organisation advertising these things as CSR or involving in such acts, but I cannot accept the claim that these acts make the company socially responsible. If the company cannot create value by producing quality products, then it is not socially responsible. These acts do not compensate even a fraction of the loss caused to the economy of the nation by poor quality products. If you might immediately feel that I am money minded (yes I am, and who is is not?), here is another way of telling the same thing: if the company's product lacks quality, is it not something against the customer? The customer is after all, at the heart of the society to which the organisation is committed to and therefore by not focusing on the quality of the product but by focusing on certain other seemingly “socially responsible” acts, the company is deluding the society, is it not?

To elaborate a step further, do customers prefer companies that proclaim their commitment to CSR? If this were the case, then customers would prefer a product even if it were inferior to another product made by a company that does not “proclaim” its commitment to CSR. Every business activity is based on rational means of creating value that is mutually beneficial to the creator as well as the consumer – this means that “public interest” in a business decision is serendipitous rather than intentional. Nobody buys a product because the creator cannot survive otherwise; the product is bought because it is the best among others in the eye of the buyer. The company can be called “socially responsible” (I still won't use that term) because it has created value for the customer's money. But the fact remains that the company has created value not for the sake of the society but for the sake of its survival – the survival based on rationality rather than on public interest.

Laws of the lawless roads

2009-06-22T21:10:00.000+05:30

Having had to put up with the fatigue of travelling to work in the MTC buses forced me to purchase a motorbike (popularly known in India as a “two-wheeler”). This was a risky decision given the fact that I did not know how to drive a geared vehicle till then. Yet I decided to take this risk rather than travel by the MTC.

I was quick enough to learn driving the vehicle but getting a driver's licence was not easy. I failed in a test for the first time in my life – a driving test for licence! However, being the sedulous guy I was, I tried the second time and was successful in obtaining the licence. In the interim, I risked my friend's life by forcing him to be my pillion rider (as I had only a learner's licence, I had to follow rules) and rode with my unfledged driving skill on the Grand Southern Trunk Road (yea, you have seen the expansion written in full for the first time in eons). I nearly crashed on a barricade which was placed in the road (supposedly to temper the speed of the unruly drivers) but was lucky to escape. This taught me the first law of driving on Chennai roads – there will be at least one close shave per journey.

I was confident of learning many more laws as I had to travel 49 km a day on the arterial roads of Chennai and in the bumpy roads of the southern suburbia, though I was not sure if I would be alive to chronicle them (luckily, I still survive – that is an accident by itself). Here are some more laws I learned:

Mothers will not use a perambulator to walk their children and they will walk to the left of the child, leaving the child open to attack from the speeding vehicles (this perhaps shows that anything 'Left' – be it ideology or side, is bound to be 'sinister')
Motor bikers will turn on their headlight in high beam in the mornings and never turn it on in twilight (a dangerous concoction of amnesia and frugality)
An auto driver (an auto is a three wheeled, highly unstable motor vehicle that plies on the Indian roads) is a person who does not know how to drive but will teach you how to drive
Auto drivers are sworn enemies of motor bike riders – each tries to harm the other and/or his vehicle – ironically, it is the hatch-back that gets harmed in this tussle
MTC buses are castrated mammoths that lumber on the Chennai roads unmindful of anything around it
An MTC bus driver is not cognizant of the following terms and objects – lane discipline (or for that matter - discipline), traffic signal, clutch pedal, rear view mirror
The MTC driver is the patron of Chennai Tamil – his aides include the share auto drivers and tourist car drivers (and at times, his cronies in the seat near the engine incite him to coin new terms)
Yellow light is the signal that encourages drivers to accelerate above 80 kph and cross the stop line
All vehicles stopping beyond the stop line in case of a red signal is the best example socialism in practice
Hatchbacks are the only vehicles that abide by their lane
SUV drivers are not aware of the presence of a brake pedal in their vehicle
It is riskier to ogle at the chick behind the hunk driving a Pulsar than to stare at the huge banners while driving on Mount Road
When a vehicle comes on the wrong side, better leave way rather than chide the driver – this way, you not only save time, but also avoid gratuitous invectives
Cyclists are the investment bankers of the Chennai roads – they are irrational, they love taking risks and they jeopardize the lives of other road users

Gender bias is prevalent on Chennai roads – I was advised by my friend (the unlucky pillion driver mentioned in the second paragraph) to be wary of the motor scooter beside me in case it's driven by a female – I however found that females drive better than males

The arm chair critic

The misnomer that was missed

Laws of the lawless roads