Aim Behind Corporate Social responsibility should be?

Image building and risk management

A positive image holds the organisation in good stead through ups and downs. It provides the kind of security that no amount of capital gains or profits can ever equal. Coca-Cola India had started with a corpus of US$ 10 million for its CSR activities in 2008. It had undertaken US$ 25-30 million a year project on water conservation, and the project "Elixir of life" to provide drinking water to nearly 30,000 school children. Coca-Cola India won the 'Golden Peacock Global Award for Corporate Social Responsibility - 2008' for these initiatives. That is the reason why the company has managed to report burgeoning sales and profits despite the tons of negative publicity they garner, with respect to health hazards of drinking aerated drinks.

Build public opinion and initiate action

The Confederation of Indian Industry's 'Mission on Sustainable Growth' has set up a code which was formulated in 2006. It provides consultancy services and technical assistance on social development and CSR. The mission's aims are to promote the reduction of excessive consumption of natural resources and emission of greenhouse gases. The code had started with 23 new signatories and the total number of code signatories had gone up to 102, by September 2008. Many large corporate houses are taking up projects-along with the help of the government-which are 'green' to promote the cause of sustainable development. When the organisation spurs people to act through its initiatives, the aims of the company stop being just to sell its products. Instead, the company becomes an agent of change and evolution in its chosen field. In fact, businesses can go a long way in eradicating long standing socially unacceptable practises.

Opportunity for creativity

Many corporate social responsibility ventures are immensely creative in the way they are so suited to the company and its objectives. India Inc has started encouraging 'intrapreneurs' or employees who have ideas that could potentially become a venture, and most of these intrapreneurs end up directing these projects and ventures. Some companies promoting intrapreneurship include Adobe, NIIT, KPMG, Pepsi and Microsoft.

Create a win-win situation

Many products encourage do-gooder customers to choose their products over others, by offering to pledge part of the sales to a charitable organisation. It is a common practise in many shopping malls to ask customers to contribute one rupee extra to their bill. If they do, the mall also contributes a rupee thus doubling the contribution.

Provide multiple business opportunities

Corporate companies like ITC have made farmer development a vital part of its business strategy, and made major efforts to improve the livelihood standards of rural communities. Unilever is using micro enterprises to strategically augment the penetration of consumer products in rural markets. IT companies like TCS and Wipro have developed software to help teachers and children in schools across India to further the cause of education. The adult literacy software has been a significant factor in reducing illiteracy in remote communities. Banks and insurance companies are targeting migrant labourers and street vendors to help them through micro-credits and related schemes. In this way, the company achieves its goals of diversification and increased sales markets and profits, along with fulfilling its social responsibilities.

Beginning of Islamic Banking in India

The first Islamic bank in the country with active involvement of the Kerala government is likely to start operations in Kochi by next year as the bank's registration formalities are currently being fulfilled on a war footing.

Kerala State Industrial Development Corporation, which is the designated agency for the formation of the bank, will have 11 per cent stake in the proposed banking company.

It will be registered as a non-banking finance company in the beginning and later get transformed into a full-fledged Shari'ah-compliant bank. It is likely that the registration formalities will be completed in the current year itself and the NBFC will become operational in 2010.

The project proposes to raise an initial capital of Rs 500 crore (Rs 5 billion) from leading non-resident Indians and Indian business houses. According to sources close to the development, leading NRI businessmen such as Mohammed Ali, MA Yusuf Ali, CK Menon and other Kerala-based industrialists such as Azad Mooppan have shown keen interest in the venture.

Though an RBI study group had eariler rejected the concept of Islamic banking, it got the backing of the Raghuram Rajan Committee on banking reforms. Purely based on Shari'ah principles, the bank will avoid interest-based business activities.

The proposed Kerala-based bank plans to invest funds in infrastructure projects, and two areas, Bai al Salam and Instinsa, under Shari'ah have been identified for such investments.

The bank will invest all its funds in wealth generating investment avenues and will distribute profit to its shareholders. The proposed Islamic bank will also set apart a social fund, compulsory under Shri'ah principles and the Islamic banking concept, and will provide interest-free loans to the Gulf returnees to set up business or small scale ventures.

The concept is getting widespread support among the Muslim community of the state as a large number of rich Muslims are strictly practicing Shari'ah principles in business.

A major chunk of such persons do not have a bank account. A lot of discussion is also going on whether investment in capital market is against Shari'ah principles. A section of the community believes that share trading is against the fundamentals of Islam. So the formation of an Islamic bank will be a relief to them.

This concept is very popular in West Asia and in predominantly Muslim nations such as Malaysia and Indonesia. Leading international banks such as HSBC and Standard & Charted have exclusive Islamic banking windows.

The biggest challenge before the Kerala-based bank will be the formation of a Shai'ah Supervisory Board in order to monitor the activities of the bank. The board should include independent scholars on Shari'ah and banking business.

Marketing In A Virtual World.

Before the Internet, small business owners like yourself were usually limited to a local market -resorting to expensive advertising and brochures, direct mail, cold-calling, networking at the local Chamber of Commerce or Rotary. You hoped customers found you through word- of- mouth or a Yellow Pages ad.
Today, you can work with a consultant, a financial planner, or a business coach across the country as easily as someone across town. In the Internet age, prospects often find you (instead of the other way around).

This is the age of the virtual customer. Yet, although the Internet has made it perfectly reasonable to land a major client you've never met in-person, it has also created new expectations among consumers.

Prospects now "Google" around to find someone with your skills. They expect you to make a good virtual "case" for yourself. If you don't pass the test, or make a bad impression, or appear lackluster compared to your competitors, you will lose the potential client.

The only way to be truly successful in business is by establishing a good reputation. And understanding the way business has shifted in the Internet age can help you bring the potential of marketing your business into the virtual world.

The Virtual First Impression
The Internet has increased the expectation among consumers that businesses will have a credible online presence.

Many of us now form "first impressions" of people and companies via our Internet browsers. From the moment your name and business appear in a Web browser to the moment your Web site loads, your first impression often means the difference between a shot at your prospect's business, or being shut out.

Think about it. You have probably used the Internet to research a company or a person you're considering doing business with. Certainly potential clients and customers are checking you out online, too.

Prospects you've never met are forming opinions about your business at the click of a mouse. Internet first impressions are not just influenced by how your Web site looks, but also by how often your business appears or how high it ranks in a web browser.

Become an Online Center of Influence
We all know people who command rapt attention whenever they speak. Others want to listen to, learn from, and emulate them. They are centers of influence, a distinction you can pursue online by developing the following qualities:

Share inside knowledge with your target market;
Participate, listen, contemplate, and offer thoughtful responses;
Be willing to voice an opinion;
Assume leadership positions in your industry
Certainly, experience counts. But this is not the only prerequisite to becoming an online center of influence that will earn you the distinction of 'trusted advisor' within your target market.

Start by making your Web site a resource for your industry. Feature lots of useful information, including articles, links, downloadable files, customer resources, and anything else of use to your target market. Be generous and give, give, give!

Create a Virtual Podium with Teleclasses
Teleclasses are a great way for businesses to develop a virtual reputation. They can be promoted easily by email, and provide information to prospects, clients, and customers all over the world, with minimal cost and effort.

Business coach and teleclass leader Michael Losier set up a teleclass about exhibiting at trade shows: 'I had 60 students in my first class, which was very profitable, and many later hired me as a consultant."

Also, it may be just as effective and less effort to participate as a guest lecturer in another professional's class rather than producing your own teleclass.

Placing Articles Online
Online articles draw upon your expertise by providing useful information that Web site visitors are actively seeking out. Online articles position you as an expert in your field and convey a level of authority that establishes trust and sets the stage for sales.

When high-traffic, high-credibility Web sites and newsletters publish your articles, you ride on the coattails of their loyal relationships with readers. Your articles are seen by visitors as referrals from trusted friends.

Some of the most prime "real estate" in the world these days is at the top of the search engine listings. The most widely used search engines rank Web sites by the quantity of other Web sites that link to them. This means that every article you publish that links to your Web site can improve your search engine rankings.

Build Online Relationships
Most business networking used to happen when we recommended an associate, swapped business cards, or connected with colleagues over lunch. But increasingly, social networking is migrating to the Internet.

Through social networking Web sites and online discussion lists, entrepreneurs can access virtual communities of prospects and associates while developing virtual "platforms" to generate leads and sales and establish themselves as recognized experts.

Marketing consultant Max Blumberg credits his involvement in Ecademy.com, a business networking Web site, with elevating his business profile and generating new clients. "When I first encountered Ecademy I'd never heard of online networking, but the benefits of a large community where I could share ideas and cultivate new relationships was very appealing."

Blumberg started by posting a profile about his business, then started sharing his knowledge with other Ecademists. "I set up a club where members could get help with common marketing challenges. Many of these people became clients and friends with whom I socialize. We reciprocally use each other's services," says Blumberg, whose Ecademy presence has even been noticed by large companies who are starting to contact him.

The key to building a niche community is identifying your ideal customers and the communities they belong to. By targeting the best, most favorably inclined prospects within a niche, you can become your target market's vendor of choice, and sell more with far less effort.

Q&A: Greece's economic crisis

Q&A: Greece's economic crisis

Greece has a debt of more than 13 per cent of its GDP for 2009 [EPA]
Greece is undergoing financial turmoil over its $400bn debt, with increasingly expensive repayments and a continually downgraded credit rating.

The country's credit rating has been lowered to junk status, a risk level that will now force many groups to stop investing in the country's bonds.

Consequently, Athens has even less money to pay back its huge loans and there are now fears that its problems will spread to other EU nations and some countries further afield.

The country's so-called austerity measures, a combination of severe cuts to public expenditure and increases in taxes, has met widespread public opposition.

The European Union and the International Monetary Fund (IMF) have agreed a $143bn bailout package over three years to to help pay its immediate debts but the package still needs to be approved by the 15 other countries in the euro zone.

Why is Greece facing this crisis?

Greece's debt rose to more than 13 per cent of its gross domestic product (GDP) in 2009.

The Mediterranean nation incurred annual budget deficits of billions of dollars via overspending in several areas.

These included benefit programmes, the public sector and government committees, as well as loss making utilities, such as Olympic Airways, the national airline, that was eventually privatised in 2008.

The government's benevolence allowed civil servants to retire in their 40s and permitted their unmarried or divorced daughters to collect their pension after they had died, the latter at a cost of about $70 million annually by some estimates.

As tensions with Turkey have continued, Greece has also spent far more than most other EU members on arms, about six per cent of its GDP in 2009.

However, about 80 per cent of the defence budget is spent on administrative and staff payments.

The costs of paying off this debt have spiralled since October 2009, when Greece revealed that its budget deficit was double previous estimates.

The announcement led to continued credit rating downgrades, meaning that increasingly investors did not want to buy the government's bonds, making it harder for Greece to gain the finance needed to pay back debt and shore up the economy.

Investors have also not been reassured by measures taken by both the Greek government and the EU to restore confidence in the country's finances.

With the downgrade of its credit rating to junk status on April 27, Greece could not secure the money it needs from the open market to pay its debt and thus had to go to the EU and IMF for bailout money.

What are the main effects of the crisis?

With the downgrade to a junk credit rating, Greece's debt became one of the most costly in the world for investors to insure.

Fears mounted that this will affect other nations using the single European currency - the euro.

Therefore, investors have been scarred off putting their finance into euro zone nations with high debt such as Portugal, Spain and Italy.

Consequently, these countries now have less money coming into their economies meaning that they are less likely be able to make payments for their own debts.

The euro has fallen to a one-year low against the US dollar due to the crisis.

This has hit US exports since they have become more expensive for euro zone nations to buy, reducing their demand.

What austerity measures is Greece taking to reduce its debt?

Greece has introduced a number of austerity measures in order to tackle its debt, leading to widespread public opposition.

The measures include cutting civil servants' bonuses - for instance, those given for speaking a foreign language and Christmas and Easter windfalls - by between 12 and 30 per cent, saving about $2.25bn.

It has pledged to trim social security payments further by raising the retirement age and will ban early retirement.

The state pension will also be frozen, saving $600m.

It is raising VAT to 21 per cent from the current rate of 19 per cent, raising $1.7bn and is to introduce a two per cent supplemental gas tax to bring in $600m.

The main VAT rate will be increased by 2 percentage points to 23 per cent.

Excise taxes on fuel, cigarettes and alcohol will be increased by a further 10 per cent.

In addition, the government has said that it will merge some state firms and sell stakes in others, in a measure to limit losses.

Military spending is to be scaled back, with arms purchases limited to 0.7 per cent of GDP in 2010.

Where is the bailout coming from?

The EU and IMF has offered three-year loan package of $143bn to Greece.

One third of the package is coming from the IMF and the rest from Greece's 15 partner countries in the euro zone.

The 15 countries will extend loans to Greece with interest rates of about 5 per cent - higher than those they face themselves, but far lower than the prohibitive rates of about 10 per cent that Greece faces at the moment on the international market.

The package must be approved by each government of the 15 other euro zone members before it can be handed over to Athens.

If approved, the first payment will be made before Greece’s next bond redemption on May 19.

Initially Athens decided not to take up the aid, preferring instead to secure finance on the open market whenever possible, but when that was no longer possible Greece had to ask for the aid package.

Will the aid and austerity measures succeed?

Greece has to make a debt payment of $11.2bn on May 19. If a deal on the aid package is not secured before then the country could default on its debt or have its debt restructured.

Increased austerity measures could have a detrimental effect.

Cuts will reduce citizens' income and reduce spending. This has the potential to lead Greece into an even more severe recession, meaning a weaker economy and a reduced ability to repay debts.

Increased unemployment felt during such a recession and cuts to key services could also lead to social unrest.

Some economists expect Greece's GDP to shrink by three per cent even if deficit cutting measures are only moderately successful.

That is one per cent more than hoped for by the EU and IMF as part of their bailout package.