I was watching television yesterday evening. Advertisements have become an important part of any serial or the news channel. One advertisement caught my attention. It was the advertisement of Proctor & Gamble. The advertisement was about buying any product of the company and some part of that will be donated for the construction of schools for the education of children in villages. Indeed it’s a noble cause. This is called the Company’s Social Responsibility or commonly known as CSR. Even ITC is doing the same thing. If a customer buys the notebooks of ITC, then a part of that goes for the education of village children. Many companies are advertising for their CSR like this. But in view, the companies are doing this out of compulsion. Not on their free will. CSR is a concept in which a company has to do for the betterment of the society and the environment.
Theoretically, the companies are supposed to do all these things on their own. But the companies are making advertisement in which they are blackmailing the customers emotionally to buy their products. The companies are required to sponsor the CSR on their own funds. But the companies are making the customers buy their products by showing emotional advertisement and they are taking the money from the customers to sponsor the CSR. Technically, this isn’t allowed. The real picture is that the companies are required to do their CSR from the net profit they are earning from their sales. But the companies are showing in their balance sheets that they have a provision of CSR and they are taking the advantage of tax rebate to save their margin of profit by paying less tax.
All these are the traps to confuse the customer. If the companies are really worried and interest about their CSR, then why aren’t they doing it from their net profit. As the companies are having provision of retained earning, which they can use in their tough time, that amount can’t be used for the CSR. If the companies will use the money from the net profit then they won’t be able to survive the competition. So they are luring the customers with their emotional advertisements to sponsor the CSR of the company. I think the companies are really using the English proverb ‘two birds in a single stone’. So now its time for the customer to be aware of these traps for the next time before going for shopping for those products of which the CSR factor is showed in the advertisements.