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The advantage of raising socially responsible behavior from defensive to a strategic role is increased ability to predict and credibly respond to society's changing awareness of particular issues. An illustrative example is that of ITC.
Realizing that solely relying on tobacco business may not be sustainable due to the increasingly hostile view of its products, reflected in legislations and anti-tobacco campaigns, it has sought to change its business model to become a FMCG player. The task is daunting, given the complexity of the issues as well as stakeholders' volatile and sometimes under-informed expectations about business' capacities and responsibilities to address societal problems. But a strategic intent will help the organization plan its future and gives the organization the benefit of advance learning.

The Social Contract

"There is an implicit contract between big business and society or indeed between whole economic sectors and society." Detractors have often successfully portrayed the contract as a one-way bargain that benefits business at society's expense. The reality is much more complex. The activities undertaken by business have clearly brought social benefits as well as costs. Similarly, however, there are two sides to a contract, and business must acknowledge that in return for the ability to function, it is subject to rules and constraints. Like the partners of a successful supply chain, it is essential that the society and the big business treat each others as partners for common good. Success hinges on having realizable objectives and measurements. As said earlier, the measurement systems must be dynamic yet measurable. Insights may be gained by looking at the balanced score card framework and modifying the same.

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* Contributed by: -
Saurabh Goswami & Malini Pande,
II Year Students,
IIM Kozhikode.