Assignment Sample on Impact Of Corporate Social Responsibility in FMCG Industry
Introduction
1.0 Introduction
CSR or Corporate Social Responsibility acts as a business model which helps organisations to be socially accountable to themselves, public, and stakeholders. It is useful for creating stronger bonds between the organisation and its key stakeholders. As per Zhang et al.(2020), strong CSR policies help boost brand value, sales, employee retention rate, and customer satisfaction. This chapter of the research includes an introductory analysis of CSR and the importance of CSR in sustainable development of FMCG companies. Key sections of this chapter include research background, research rationale, main aim objectives & questions, research significance, and structure of the dissertation.
1.1 Research Background
CSR acts as a management concept where organisations are supposed to incorporate environmental and social aspects in business operations. It is understood as a way corporations achieve balance of environmental, social, and economic imperatives. All these things are supposed to be done by an organisation while fulfilling requirements of shareholders and stakeholders (Bhatia and Kumar, 2022). Hence, organisations are required to ensure strong alignment between strategic business management processes and CSR. Importance of incorporating CSR initiatives with business processes includes showcasing consistency, winning loyalty of customers and ultimately increasing customer retention rate and boosting sales.
Sustainable development can be defined as development which meets present needs without hampering future generations’ ability to meet their needs. Based on the work of Montiel et al.(2021), sustainable development of organisations identifies strategies for reducing negative environmental impact resulting from their activities and operations. A corporation’s sustainable development practices can be highlighted from its environmental, social and governance matrices. As CSR is closely related to the environmental, social, and governance aspects of a company, it positively aids in its sustainable development. Ensuring sustainable development allows an organisation to reduce business costs, incorporate more innovative strategies, and improve its reputation in market.
Fast-moving consumer goods or FMCG market offers products which sell quickly. These products are generally sold at a low price as compared to slow-moving consumer goods. Main offerings of FMCG market include vegetables, fruits, milk, gum, soda, beer, toilet paper, along with over-the-counter drugs. Within an economy, the FMCG market is crucial as it helps in fulfilling day-to-day requirements of individuals and also provides employment to large numbers of personnel. As this sector is an integral part of an economy, CSR initiatives are beneficial for both customers and overall economy. Incorporation of CSR initiatives helps create trust among customers, so demand FMCG goods from that particular brand will rise. In this way, sustainable development of the company can take place.
More citations needed in most sections
THE BACKGROUND COULD BE MORE DETAILED.
1.2 Research Rationale
In today’s world, CSR has become an integral part of organisations. As world is facing challenges like climate change, social injustice, and inequality, organisation plays an important role in founding solutions for them. CSR initiatives are helping organisations around the world address these issues by promoting sustainability, supporting communities, and advocating practices which benefit society (Aftab et al. 2023). In current times, global FMCG market has a size of US$103.57bn and is projected to reach US$131.54bn by 2028 (Fortunebusinessinsights, 2023). India is one of the leading developing countries around the world which is 5th largest economy based on GDP (Forbesindia, 2023). In this country, FMCG market ranks 4th and has a size of US$110bn (Maximizemarketresearch, 2023). Some of the leading FMCG companies of India include Hindustan Unilever Ltd, Britannia Industries Limited, Dabur India Limited, ITC Limited, Nestle India Ltd, Procter & Gamble, ParleAgro, Amul, Tata Consumer Products, and Patanjali Ayurved Limited. Hindustan Unilever is the topmost FMCG Company in India (Statista, 2023).
Figure 1.1: Leading FMCG companies in India as of May 2023, by market capitalisation
(Source: Statista, 2023)
As a large number of customers are being served by FMCG sector daily, they must maintain adequate CSR policies for sound sustainable development. Some of the leading CSR measures taken by FMCG market are working with Environment, Health care, Education, Community welfare, ensuring Women’s empowerment and Girl Child care along with reducing pollution from packaging materials (Singh and Misra, 2022). Besides, these companies are providing higher focus on reducing climate change issues and reducing carbon footprint. All these aspects are positively aiding their performance in the market. Hence, this research is beneficial for highlighting how CSR measures are contributing to the sustainable development of FMCG companies and the overall market.
1.3 Aim
Aim of this study is to critically analyse interrelationships between organisational orientation towards implementation of sustainability and incorporation of corporate social responsibility (CSR) objectives for effective organisational performance management. Further, analysis of organisational sustainability and CSR abilities would be identifying value creation needs for businesses in FMCG sector in future.
1.4 Objectives
- To assess customer awareness on organisational CSR initiatives along with its integration in product and marketing strategy development abilities in FMCG industry
- To evaluate CSR practices and sustainability approaches implemented in an organisation encourage customers to pay additional price for dairy product in FMCG industry
- To examine challenges associated with customer responses to purchase sustainable products according to gender and age characteristics for dairy product in FMCG industry
1.5 Research Questions
- What is the level of customer awareness on organisational CSR initiatives along with its integration in product and marketing strategy development abilities in FMCG industry?
- What is the response of customers to pay additional price for dairy product while businesses follow CSR practices and sustainability in FMCG industry?
- What are the challenges associated with customer responses to purchase sustainable products according to gender and age characteristics for dairy product in FMCG industry?
1.6 Research Significanc
Iedentification of dynamics of organisational orientation towards sustainability as well as CSR objectives would be beneficial for decreasing challenges related to developing an understanding on CSR requirements in FMCG industry. This research critically evaluating customer focus on organisational sustainability development along with CSR objectives would be beneficial for evaluating their awareness on green approaches. Customer focus for organisational CSR development helps in developing a loyal community and managing positive influence on environmental and economic development of businesses. This associated with identification of appropriate and responsible approaches in business operation management in the discussion of this research would have positive influence for businesses in FMCG industry. This would be beneficial to manage greater approaches of operational performance improvement to attract customers associated with supporting green approach management in the FMCG industry.
1.7 Proposed Research Contributions
Academic contribution associated with research conduction of CSR effectiveness for FMCG businesses has increased opportunities for researcher in assessment of changing business opportunities affecting business activities. This research has focused on identification of problems associated with dairy businesses facing challenges in practical implementation of CSR strategies in FMCG industry. It also assessing organisational challenges faced during sustainability and CSR management has increased issues for businesses in effective operational planning activities. This has indicated that this research conduction activities understanding different approaches of organisational management activities including CSR and sustainability approaches would be enhancing organisational understanding on green development approaches. Further, this processes assisting in improvement of quality and standards for dairy products would have positive influence in developing organisational plans for effective sustainable and CSR approaches for FMCG businesses.
Chapter 1 has included introductory understanding in evaluation of CSR and sustainability approaches for organisations operating in FMCG industry. Chapter 2 of literature review activities includes wide range of information from already existing literature on CSR and sustainable business development opportunities in FMCG industry. Chapter 3 of methodology chapter includes associated techniques and processes for developing a systematic research practices in data collection and interpretation activities. Chapter 4 of data analysis focuses on interpretation of collected information of CSR and sustainable approaches used in FMCG industry in management of effective approaches of organisational performance management in modern times. Lastly, chapter 5 of conclusion and recommendations chapter has focused on providing summary to analysis developed on CSR and sustainability management activities for developing organised processes of operation management in FMCG industry.
1.9 Summary
From this chapter, it can be summarised that sustainability approaches managing economic, environmental and social approaches of business management in FMCG benefits in decreasing challenges related to ineffective product development activities. This associated with CSR strategies benefits in decreasing organisational issues in managing positive influence on environment. This research intending to evaluate different aspects of sustainability and CSR orientation in a business has increased organisational opportunities for customer awareness and encouragement management activities. Furthermore, following an organised dissertation structure and research objectives would be beneficial for decreasing challenges related to integration of CSR and sustainability approaches for customer attraction in the FMCG industry.
Chapter 5: Conclusion and Recommendations
5.0 Conclusion
From above study, it has been concluded that “Corporate Social Responsibility (CSR)” is inclined to sustainable activities, done by organisations which is essential to increase brand reputation across globe. A sense of accountability, in terms of companies’ goals, information on product and service, to customers can be fostered through incorporating CSR activities by organisations. From this study, it can be concluded that CSR activities, executed by FMCG companies, especially in Indian dairy sector, are effective to earn customer loyalty regarding products and services. Buyers would be satisfied to purchase products and services from socially responsible companies which would accelerate customer loyalty. CSR activities of FMCG companies help to share important information about products and services among customers which proves brand loyalty. As found in this study, CSR activities help FMCG companies in India to make their products and services much more accessible among customers which eventually increase number of sales. From this study, it can be concluded that FMCG companies of India, operating under dairy sectors can initiate activities like “sustainable sourcing”, “waste reduction” and “environmental conservation” through CSR activities. Apart from this, it has been observed from this study those customers’ attitudes, loyalty and beliefs towards dairy products have been increased through CSR activities. It has been obtained from research results that CSR activities are beneficial enough for FMCG companies to increase environmental balance along with positive impacts of organisational activities on the environment. In addition to this, it has been understood from this study that collaboration among stakeholders like employees, communities, customers and non-governmental organisations can be developed through proper implementation of CSR activities. Proper CSR activities of companies include economic, ethical, discretionary and legal expectations of community towards business organisations. From this study, it can be concluded that issues like “climate change”, “inequality” and “social-injustice” are prevalent in society. These are to be assessed and resolved by organisations through developing CSR strategies.
In this study, potential CSR strategies are to be developed and incorporated by FMCG organisations in India which are effective for ensuring well-being of environment and community. It can be concluded from this study that Indian FMCGs need to respond to “external pressures” so that required actions can be taken to mitigate those risks. Apart from this, innovation and differentiation are to be assessed by FMCG organisations through incorporating CSR activities to ensure acceptability of customers regarding organisational activities.
In this study, a survey was executed to gain data about CSR activities of Indian FMCG Dairy companies and its impact on organisational performance. Analysing survey responses, it has been concluded that sustainable approaches need to be developed as well as incorporated by organisations to minimise negative impacts of organisational behaviours on environment. Apart from this, importance of developing and executing CSR activities by FMCG companies has been defined by respondents. In this regard, cost efficiency, positive impression of brand among customers, essential activities of FMCG companies and increased trend of incorporating CSR activities have been addressed from responses of customers. Therefore, it can be concluded from this response that CSR activities can reduce operating cost of organisations in terms of manufacturing and supply-chain operations and this develops a good impression about organisational activities in customers’ minds. In addition to this, most of respondents shared that CSR activities help FMCG companies to contribute to sustainable development. Hence, it can be concluded that Indian dairy companies are required to develop as well as implement CSR activities to improve sustainability of products and services which is effective to achieve global competitive advantage.
From responses gathered in survey, it can be concluded that customers of Indian FMCG dairy companies are well aware of CSR initiatives, taken by these organisations which reflects an extensive acceptance of organisational activities. It has been found from opinions of respondents that CSR activities like waste management and energy consumptions have been implemented by Indian dairy FMCG companies which ensure environmental wellbeing as well as a good health of community. Apart from this, participants agreed with the fact that ethical initiatives like “ethical sourcing” and “fair trade practices” are required to be initiated by Indian FMCG companies to ensure positive impacts on both stakeholders and local communities. Therefore, it can be concluded that CSR activities help organisations to initiate sustainable approaches which are effective to ensure environmental balance and wellbeing of community. On other hand, it has been expressed by respondents that CSR activities, undertaken by dairy companies influence their purchasing decisions and they are more likely to buy products from socially responsible companies. Hence, it can be concluded that Indian FMCG dairy companies are required to initiate CSR activities to increase number of sales and that is directly associated with profit generation. As per their opinion, customers have expressed that they would shift to other brands if they find that company to be more socially responsible than the present one. Thus, it can be analysed that CSR activities are beneficial enough to retail potential customers.
It can be concluded from this study that customers would continue to purchase dairy products from same companies even if they increase product price due to CSR initiatives. “No use of plastics”, “incorporating sustainable approaches” and “initiating sustainable packaging” have been recommended by respondents in survey. It can be concluded that, through rewards, initiation plastic-free packaging, and increasing product prices and initiating inclusive workplace, Indian FMCG dairy companies can include CSR activities within organisations. Rewarding sustainable organisations, making CSR activities mandatory and reducing tax are responsibilities of Indian Government to motivate FMCGs to initiate CSR activities.
5.1 Linking with Objectives
Objective 1 focused on evaluating relationship between CSR activities and organisational sustainability in creating value for stakeholders which has been met in the Literature Review (LR) part in sub segment 2.2 and through Question 7 and 8 in Analysis and Findings of this study.
Objective 2 is about customer awareness about CSR activities, undertaken by FMCG companies to improve marketing strategy which has been linked with sub-segment 2.2 in LR and through Questions 5, 6 and 8 in Analysis and Findings of this study.
Objective 3 focused on CSR activities and sustainability approaches, incorporated by Indian dairy FMCG companies and that has been met in LR in sub-segment 2.4 along with Questions 10 and 11 in Analysis and Findings part.
Besides this, Objective 4 highlighted challenges associated with customer responses while purchasing a sustainable product which has been met in sub-segment 2.4 and through Questions 12, 11 and 13 in Analysis and Findings.
Objective 5 is inclined to potential strategies of CSR which influence customers’ buying decisions and that has been met in sub-segment 2.3 in LR part along with Questions 15 and 16 in Analysis and Findings section of this study.
5.2 Recommendations
Increasing awareness
Awareness about CSR activities are to be increased among employees as well as administrative heads of FMCG dairy companies so that required measures can be undertaken. As suggested by Sen Gupta and Wadera (2021), CSR campaigns are to be developed by organisations so that whole community can get a clear idea about organisational activities to ensure well being of environment and people. Apart from this, through CSR campaigns brand reputations of Indian FMCG dairy companies can be increased among customers who would be helpful to accelerate number of sales. Therefore, customer satisfaction can be generated by inviting CSR as well as sustainable activities which is essential to achieve global competitive advantage.
Facilitating communication
Communication plays a great role within organisations through which important information can be transferred among involved stakeholders. As elaborated by Khan and Fatma (2019), extensive communication helps organisations to accelerate productivity and initiate CSR activities by motivating employees to meet sustainable targets. Thus, it can be recommended that extensive communication needs to be fostered by administrative heads of FMCG companies so that sustainable goals can be explained among employees so that they get a clear idea about their own roles and responsibilities. Benefits of communication include “maintaining solidarity among employees”, “increasing awareness”, “fast risk mitigation” and “increased employee engagement”. In addition to this, through communication, prevalent issues in different departments of FMCG dairy companies can be addressed by administrative heads. Apart from this, an inclusive work culture can be ensured through proper communication with both customers and employees which reflects CSR initiatives.
Incorporating technology
Technology has enough potential to accelerate pace of production which needs to be incorporated by FMCG companies to develop CSR activities and ensure environmental balance. As opined by Končar et al. (2020), technologies like “cloud computing”, “Artificial Intelligence (AI)”, “blockchain” and “Internet of Things (IoT)” are to be incorporated by FMCG companies to ensure CSR activities. In this measure, cloud computing would be helpful to manage and store data in a cost-effective way by FMCG companies that would help in fostering sustainable activities. Apart from this, IoT would be helpful to develop integration among sustainable approaches, manufacturing, employee dealing and ensuring wellbeing of involved stakeholders. On the other hand, AI would be effective to get an all-encompassing idea about current market trends, customer demands and employees’ expectations. This would be helpful for FMCG companies to develop CSR initiatives to ensure community wellbeing and minimise operating costs to increase profit generation.
5.3 Research Limitations
In this study, a survey has been executed through which opinion of customers about importance of CSR activities to be done by FMCG companies in India has been acquired. It would have been better if an interview could be arranged by involving CSR managers of Indian FMCG dairy companies. In this way, more detailed information about issues faced by these companies while developing CSR strategies along with customers’ outlook towards sustainable approaches could have been gathered. Lack of time and capital were barriers in this study to arrange for interview sessions which can be considered a limitation. Therefore, an interview needs to be arranged in future to acquire more in-depth information about CSR activities and its impacts on organisational performance of Indian FMCG dairy companies.
5.4 Future Scope
This study evaluates positive impacts of CSR activities, done by Indian FMCG dairy companies along with analysing customers’ outlook towards it. Environmental issues regarding climate change, increased carbon emission and negative impacts of it on health of people have been elaborated in this study. Apart from that, as benefits of this study, potential strategies to resolve those issues have been developed through which effective sustainable approaches can be developed and implemented by Indian FMCG dairy companies. Therefore, it can be stated that significance of developing CSR strategies and its impacts on both environment and whole community have been observed through this study. Along with this, research results of this study would be helpful to initiate further research works on CSR activities and its impact on FMCG companies to earn global competitive advantage. Negative environmental impacts like improper waste management and increased carbon emission through FMCG companies can be perceived through research results of this study. This would be helpful to explain sustainable goals among employees by Indian FMCG companies by limiting negative environmental impacts which reflects future scopes of this study.
References
Alsaif, A. and Sabih Aksoy, M., (2023). AI-HRM: Artificial Intelligence in Human Resource Management: A Literature Review. Journal of Computing and Communication, 2(2), pp.1-7. https://journals.ekb.eg/article_307053_88bdffd16063266f15192e6cc9f07a3c.pdf
Bhatia, M.S. and Kumar, S., (2022). Linking stakeholder and competitive pressure to Industry 4.0 and performance: Mediating effect of environmental commitment and green process innovation. Business Strategy and the Environment, 31(5), pp.1905-1918. https://onlinelibrary.wiley.com/doi/pdfdirect/10.1002/bse.2989
Djakasaputra, A., Wijaya, O., Utama, A., Yohana, C., Romadhoni, B. and Fahlevi, M., (2021). Empirical study of Indonesian SMEs sales performance in digital era: The role of quality service and digital marketing. International Journal of Data and Network Science, 5(3), pp.303-310. doi: 10.5267/j.ijdns.2021.6.003
Forbesindia (2023). About Indian FMCG market size. Available at: https://www.forbesindia.com/article/explainers/gdp-india/85337/1#:~:text=India’s%20rank%20in%20GDP&text=India%20is%20now%20the%20fifth,rates%2C%20and%20favourable%20demographic%20trends. [Accessed on 21st June 2023]
Fortunebusinessinsights (2023). About Indian FMCG market. Available at: https://www.fortunebusinessinsights.com/fmcg-logistics-market-106299#:~:text=How%20much%20is%20the%20FMCG,USD%20131.54%20billion%20by%202028.[Accessed on 20th June 2023]
Khan, I. and Fatma, M., (2019). Connecting the dots between CSR and brand loyalty: the mediating role of brand experience and brand trust. International Journal of Business Excellence, 17(4), pp.439-455. https://www.researchgate.net/profile/Imran-Khan-59/publication/332333606_Connecting_the_dots_between_CSR_and_brand_loyalty_The_mediating_role_of_brand_experience_and_brand_trust/links/5e327da8458515072d6e2b1d/Connecting-the-dots-between-CSR-and-brand-loyalty-The-mediating-role-of-brand-experience-and-brand-trust.pdf
Končar, J., Grubor, A., Marić, R., Vučenović, S. and Vukmirović, G., (2020). Setbacks to IoT implementation in the function of FMCG supply chain sustainability during COVID-19 pandemic. Sustainability, 12(18), p.7391. https://www.mdpi.com/2071-1050/12/18/7391/pdf
Maximizemarketresearch (2023). About Indian FMCG market. Available at: https://maximizemarketresearch.com/market-report/indian-fast-moving-consumer-goods-fmcg-market/29038/[Accessed on 22nd June 2023]
Montiel, I., Cuervo-Cazurra, A., Park, J., Antolín-López, R. and Husted, B.W., (2021). Implementing the United Nations’ sustainable development goals in international business. Journal of International Business Studies, 52(5), pp.999-1030. https://link.springer.com/article/10.1057/s41267-021-00445-y
Sen Gupta, S. and Wadera, D., (2021). Impact of cause-affinity and CSR fit on consumer purchase intention. Society and Business Review, 16(1), pp.26-50. https://www.emerald.com/insight/publication/issn/1746-5680
Singh, K. and Misra, M., (2022). The evolving path of CSR: toward business and society relationship. Journal of Economic and Administrative Sciences, 38(2), pp.304-332. https://www.researchgate.net/profile/Kuldeep-Singh-39/publication/349292714_The_evolving_path_of_CSR_toward_business_and_society_relationship/links/602c9b4f92851c4ed5791423/The-evolving-path-of-CSR-toward-business-and-society-relationship.pdf
Statista (2023). About Indian FMCG market main players. Available at: https://www.statista.com/statistics/1304082/india-leading-fmcg-companies-by-market-capitalization/[Accessed on 23rd June 2023]
Zhang, Q., Cao, M., Zhang, F., Liu, J. and Li, X., (2020). Effects of corporate social responsibility on customer satisfaction and organizational attractiveness: A signaling perspective. Business ethics: A European review, 29(1), pp.20-34. https://fangfang-zhang.github.io/files/2019-BusinessEthics-SocialResponsibility.pdf
Know more about UniqueSubmission’s other writing services:
