Corporate Social Responsibility

Businesses exist in dynamic environments and exist as individuals who need to respond to social duties like any responsible citizen. This responsibility of the corporate is termed as Corporate Social Responsibility (CSR). The term is often used interchangeably for other terms such as Corporate Citizenship and is also linked to the concept of Triple Bottom Line Reporting (TBL), which is used as a framework for measuring an organization’s performance against economic, social and environmental parameters (ASOCIO Policy Paper, 2004, p. 2).

Today organizations understand their responsibility in this respect and have responded accordingly by factoring in CSR activities in their normal course of business. Though the corporate in the developed nations have long been working on this, their counterparts in the developing nations have started-off late and are still trying to understand how spending on social projects adds to their business value. What the businesses fail to see in such investment is; the value proposition in such initiatives. “If, instead, corporations were to analyze their prospects for social responsibility using the same frameworks that guide their core business choices, they would discover that CSR can be much more than a cost, a constraint, or a charitable deed–it can be a source of opportunity, innovation, and competitive advantage (Porter & Kramer, 2006, P-80).

This paper examines the CSR scenario in India and the proposition of starting an organization which raises money for orphans and orphanages. The firm will organize orphan children and train them to sing for professional music albums and use the revenue generated for betterment of orphans through collaboration with Government and Non-Government Organizations (NGOs) using the much popular and successful Public Private Partnership (PPP) setup.

The Initiative

This initiative will be named “Ray” and the flagship firm that will run the business would be named “Ray Music”. The initiative would be named Ray with the thought that it will spread rays of happiness in the lives of the children make world a better place for them to live in. India is still a growing nation and a wide economic disparity exists between the poor and rich. In such a scenario the state of homeless, parentless orphans is even poor. They are forced to stay either on roads or in orphanages where the adoption rate is very poor.

The Indian music industry was pegged at about USD 1555 Million (INR 700 crores) in 2006 estimates by its industry body the Federation of Indian Chamber of Commerce and Industry (FICCI) and Price WaterHouse Cooper (PWC) and the with the mobile music industry being a equal partner accounting for another USD 1600 Million (INR 720 crores). (Mobile Pundit Website, 2006).

After analysis this market it makes a good business sense to invest in such a market and in this sector which is growing at a steady pace. The initiative will also leverage help from the business houses which already support a lot of CSR initiatives. In an industry report it was estimated that the Indian corporate sector spent US$ 6.31 billion on social expenditure during 2007-08, up from US$ 3.68 billion spent during the previous fiscal. The business model of this initiative would a Not-For-Profit type were the stress would be on benefitting the orphans by using the revenue generated by the business.

The money that is earned after offsetting all the cost elements would be used for projects that would help orphaned children get education, medical facilities and other basic amenities. The project will also try to ensure that the adoption rate of orphaned children is increased by running campaigns for it.

The Project

As discussed in the earlier part of this paper; Project Ray would be a Not-For –Profit initiative which would be run with basic proposition to help the needy, orphaned children in India. The mission and vision of the organization would be as follows:

  • Vision: To bring back smile back on the face of every orphan child by ensuring him of a better tomorrow.
  • Mission: To create a sustainable business which would be centered around uplifting the condition of orphaned children in India.
Costs INR Revenue INR
Rent of Office 3000 Through sale of CDs (Target 5000 Cds per series @ Rs. 200) 1,000,000
Electricity 500 Sale of Ringtone rights
(Avg. expected per song: Rs. 50000) (Each CD would sell at least 2 songs as ringtones and download rights)
100,000
Staff Salary (1 PM: 7500, 2 Staff Members: 5000 each, 5 Support Staff: 3000 each) 32,500 Advertisements
(Per CD)
150,000
Singers Fee (10000 per song X 5 songs per CD)
(Project based)
50,000 Revenue from Concerts involving the artists: post expenses (1 per month) 300,000
Other Misc. Expenses (Stationary/Advertisement etc) 40,000
Estimated Cost Per Project (With a target 1 month to complete) 126,000 Estimated Revenue Per Project (With a target 1 month to complete) 1,550,000

Since the project is a Not-For-Profit initiative it will attract nominal compliance expenses and taxes. Thus at this rate the business will manage to make a profit of about INR 1, 424, 000 (Approx USD 29667 @ Exchange Rate of INR 48 per USD) Per Month (if it is able to turn around one CD per month).

This money will take care of the expenses that the venture will make to sustain other children through sponsored orphanages and also imparting them education by partnering with government and non-government institutions. A network of volunteers would also be set up who would help market the CDs and also impart free education to the kids as per their skills and educational qualifications.

Thus the business will meet multiple benefits like:

  • Making the children self reliant
  • Encouraging them to earn a decent livelihood and educate themselves
  • Save the children from falling for crime to earn a living
  • Teach them group and social living
  • The awareness about such children would make the process of their by families easier
  • The initiative would not be dependent on grants and other agencies for sustenance

The aim of this venture is to help the orphans and save them from falling for crime and being target of other social ills like prostitution, human trafficking, child labor etc. The venture while reinforces the dignity of labor in the children, it also makes them aware of their potentials and hence prepares them to take on the challenges of world.

References

  1. ASOCIO Policy Paper, (2004), Corporate Social Responsibility.
  2. Mobile Pundit Website, (2006), Mobile Music Industry Worth Rs. 720 cr, Web.
  3. Porter, Michael E. and Kramer, Mark R. (2004), Strategy and Society: The link between Competitive Advantage and Corporate Social Responsibility, Harvard Business Review, Accessed using: EBSCO host (P 78-82)