CSR: Sustainable Growth Strategy
CSR: Corporate Social Responsibility - The Sustainable Growth Strategy of multinational corporations.
For a company to grow sustainably, economists have come up with a lot of theories as well as development strategies. The most prominent is CSR - Corporate Social Responsibility, which is the Sustainable Growth Strategy that most multinational corporations use.
After graduating from the MBA, I also proposed this strategy of sustainable development to a large Vietnamese company, and this CSR program was agreed to implement. But after that, it was completely different from the original proposal. Recently I also showed a concept of CSR for a major brand that I was in charge of, the concept was agreed to work, but when done, it was once again completely changed. Actually, for a Vietnamese company, big or small, what they care about most is profit, sales, rather than benefits in the future. Therefore, for a company to implement this kind of strategy, it is not easy. But I still hope that in the near future, our Vietnamese companies may pay more attention to this Sustainable Growth Strategy.
To help you better understand CSR - Corporate Social Responsibility, I would like to explain more and give examples of this issue as follows:
CSR - What is Corporate Social Responsibility?
If the definition of a broken book and its model is a bit confusing, I would like to give a simple way according to the 3Ps model as follows. For sustainable development, the company needs to see itself as a member of the community, and fulfill its obligations including: People, Planet, and Profit.
Actually, this is a model to evaluate a CSR program rather than a definition, but to evaluate a CSR program, often companies rely on these 3Ps, so just by clicking here, you can I understand its concept.
People: refers to the community and the internal employees. What does the company do to improve the economic situation of the community, society, labor resources, knowledge and life of the community?... In this case, we often see specific programs like Management Trainee of multinational corporations such as Unilever, Pepsi, P&G, etc. This program helps educate and train new graduates to acquire knowledge and skills. Wrong practices meet the needs of the job. When students are trained, they can create specific values for the community and society. Another example is that, when storms and floods occurred in the Central region, a company launched a program to give up their clothes, and jointly implemented a charitable program to these affected areas.
Planet: refers to the company's actions to make the living environment more safe and better. For example, manufacturing companies that keep their surroundings areas or rivers clean and recycling waste if needed by applying new technologies. Although they invest more in this system and it can not translate into profit directly, it is a good starting point which build a good image to their target consumers or customers. Another example is OMO, which has many of its own CSR programs including two outstanding activities: educating and helping children to develop better and environmentally friendly activities. OMO's annually eco-friendly activities start with researching and requiring suppliers to provide or use more eco-friendly ingredients such as recycled plastics that are harmless to the environment. school,...
Profit: is how to make a profit for the company. Once the company is profitable, it will pay taxes to the state, contributing to the national budget. Once a company is profitable, it can grow, in addition to contributing to the national budget, it also brings more jobs to the community and the country or region in which it operates, thereby helping the movement of goods becomes smoother and better leading to economic development.
These three factors are often tied together, analyzing a typical example as follows:
Quang Nam (Hoi An Ancient Town belong to Hoi An) is flooded, people cannot work, and there is a famine here.
One company, for example Tan Hiep Phat, launched the program "Saving in Work, sharing in Life" with the program mechanism as follows: employees in the company should pay attention to their water usage, and should use savings, after hours the company will turn off the air conditioning system to save electricity. The money saved will contribute to the fund to support the central region. The company's employees will come to the central region and do charity programs. Here, when saving electricity and water the company is minimizing the affect to the environment which means the Planet, where the water is increasingly depleted, there are places where there is no water to drink. When saving, the cost will be lower than normal, with a large company, just reduce it, a month can reduce a significant cost, helping increase the company's profits. This profit is used to help people in flooded areas. When people get help, they can come back to work and create value for life soon.
Another case study is 1 millions glasses of milk and then 6 millions glasses of milk, and finally 8 millions glasses of milk program of Vinamilk.
Here we see, when launching this program, Vinamilk not only helped 6 million poor children with milk to drink, but also helped those who wished to give their part to the poor. Consumers feel that they can both use their money to use the product and bring value to another object in need. And when the program was a success, the company's revenue increased as well, resulting in the program having a new version and helping more people.
What are the benefits of these CSR campaigns?
Major corporations have included CSR - Corporate Social Responsibility in the sustainable Growth strategy in their annual reports. Therefore, as you can see, CSR aims to bring long-term sustainable development to the organization rather than the immediate benefits. That is the point that limits the application by large companies and corporations of Vietnam.
Benefits of CSR include:
1. Risk management:
Reputation takes decades to build, but only accidents, minor negligence, or minor scandals can ruin that reputation. Imagine if a company had a manufacturing problem or had a scandal, but before that, it had made many new educational programs for the community, contributing to the children's funds. Your younger sister, is it because of a scandal that you rushed away from the company? Through many surveys around the world, companies that contribute to the development of the community, carry out CSR campaigns, when a crisis occurs, consumers tend to overlook it. those mistakes of the company.
2. Brand favorite:
CSR can help build brand loyalty based on ethical values that are appropriate for the industry or brand. For example, the program "Drink milk is sharing" of Vinamilk, if you often drink milk, now when you buy milk, you feel good for others, whether you feel like drinking milk of Vinamilk than not? I believe so!
3. Differences in brand:
CSR can help build brand differentiation based on the value of the brand to consumers, the big brands will have 1 more 1P in Marketing Mix, which is Brand Philosophy. For example, according to OMO, "Learning too much is not necessarily good while playing and it is very dirty to help children learn new things" - "Children learn things or are afraid of stains", therefore, OMO helps build 1000 playgrounds for children. Children across the country, helping them to develop physically during play and very dirty. (Program implemented from 2006 to present)
Appropriate CSR programs can increase the attractiveness of partners themselves. For example: Unilever is a company that is always looking for partners to produce good materials for the environment, if you supply bottles of laundry detergent that is friendly to the environment, you will be able to do business in the long run Unilever.