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SM Research Essay 2035299-2033296
SM Research Essay 2035299-2033296
SM Research Essay 2035299-2033296
ESSAY
“Getting and Sustaining Competitive
Advantage through Social Impact: A
framework for Pakistan’s market”
Course Name:
Strategic Management
Submitted to:
Miss Seema Kamran
Submitted By:
S.Wajhi Ul Hassan (2035296)
Waleed Ashar (2035299)
Abstract:
The Purpose of this research is to evaluate and create the theoretical narrative of creating
shared value and strategic corporate social responsibility. We investigate the impact of Pakistan
Market economically and socially. In this research we evaluate which approach to be practically
adopted by Pakistani firms. We also research how covid‐19 effect Pakistan industries and forced
companies to consider factors other than shareholder primacy. We also find out in Pakistan
companies often practice CSR as a short term, reactive tool based on charitable activities, the
focus of most of CSR research is also towards child labor issue.
Contents:
CHAPTER # 1: INTRODUCTION ............................................................................. 8
1.1 Introduction: .............................................................................................. 9
1.2 Concept of CSV AND CSR THEORY: ............................................................. 9
CHAPTER#2 LITERATURE REVIEW ...................................................................... 10
2.1 Corporate Social Responsibility (CSR) in Pakistan: ...................................... 11
2.2 Scale able Framework of CSR Activities in Pakistan: ................................... 11
2.3 Examples of CSR activities in Pakistan: ........................................................ 12
2.4 Impact of Covid‐19 in Pakistan Economy: ................................................... 14
CHAPTER#3 ANALYSIS AND FINDINGS ............................................................... 15
3.1 Critical discussion of CSR and CSV in Pakistan ............................................. 16
CHAPTER#4: CONCLUSION ................................................................................ 19
4.1 Conclusion: ................................................................................................... 20
REFERENCES ...................................................................................................... 22
CHAPTER # 1: INTRODUCTION
1.1 Introduction:
Corporate social responsibility (CSR) requires businesses to contribute to environmental and
societal improvements. CSR is a company's concern for its consumers, the community, and
society while generating income and meeting the needs of its workers and shareholders.
Incorporating CSR strategies into a firm's corporate operations and decision‐making increases
innovation, opens up potential growth possibilities, and generally helps to maintain a firm's
sustainability. As a result, with an efficient governance structure, organizations focus on the
economic value, performing their responsibilities, and contributing to society. Firms with better
social responsibility benefit social and moral chances by exhibiting better social behavior if we
talk about the concept of creating shared value (CSV). It goes beyond the concept of CSR, which
focuses on strengthening current corporate processes, to expanding corporations' roles in
advancing social change and helping in the development of social and economic conditions in
societies where companies work.(Hules, 2015)It refers investing in the sustainability of both
organizations private and governmental is essentially dependent on the stakeholders. A
company is just as strong as the employees and attracting the best and brightest to their cause
is a constant struggle for company owners and managers.
1.2 Concept of CSV AND CSR THEORY:
Corporate social responsibility is commonly thought of as an expense center rather than a
benefit center. Shared value creation, on the other hand, is concerned with new business
developments that open up new markets, boost performance, and increase strategic
positioning.
CSV and CSR have a positive impact on a business's expansion and long‐term success. It is also
possible to promote the growth of jobs and the building of a local society. To put it another
way, CSV and CSR are focused on cooperative partnerships between businesses and society's
stakeholders. Corporate partners bear ethical, moral, fiscal, and budgetary obligations under
CSV and CSR principles.
CHAPTER#2 LITERATURE REVIEW
LITERATURE REVIEW
2.1 Corporate Social Responsibility (CSR) in Pakistan:
This can be achieved by promoting a healthy economic climate and collaborating with the
corporate companies to establish primary‐level community development projects. From a social
and economic context, corporate social responsibility (CSR) practices in Pakistan are essential to
the country's stabilization. The corporate sector's contribution to resolving Pakistan's problems
is important. This is the primary explanation for Pakistan's recent increase in CSR activities.
Pakistan is dealing with a variety of issues, including electricity shortages and law and order
issues. Without a doubt, the current administration was trying to resolve these issues. The
corporate market should play a significant role in reducing people's deprivation we also find out
after go‐through of several research papers the majority of CSR study in Pakistan works on child
labor issues. Pakistan is no exception to the above‐mentioned developing‐country scenario.
Pakistan may have been acquainted with CSR for the first time (year, 2000) when the matter of
child labor in the football industry (Sialkot, Pakistan) made international headlines, As a result
of this problem, national and international non‐governmental organizations have arisen. (Khan,
2017) We analyses that it is right time corporate sector should implement CSR policies and start
working on CSR activities wisely.
2.2 Scale able Framework of CSR Activities in Pakistan:
Pakistan was established in 1947. Pakistan track record tells that it has made good progress in
recent decades. However, despite its success, it might not be able to enter the list of developing
countries. Pakistan remains to be listed as a developing region. More than 90% of Pakistan
population is Muslim so as a Muslim society our beliefs, culture, and social standard had also
matured over the last fourteen hundred years but even so as a country, Pakistan is in the
middle of a growth stage. Every society or even community should be controlled by the same
system of rules. This is to retain things as they are, to protect land, financial interests, and long‐
standing relationships. It is also thought to be the society's backbone. This demonstrates how
important it is for society to be aware of the rules. It demonstrates the society's strength in
terms of awareness.
2.3 Examples of CSR activities in Pakistan:
As per our research we find out some domestic and international companies who recognized
the importance of CSR operations in Pakistan. Let's take a look at what they're doing to help the
situation in Pakistan.
Unilever Pakistan's contributions in this respect must be admired. Its Sustainable Living Plan
lays out several core objectives that are critical to Pakistan's sustainability. The climate is a
major focus, with plans to reduce Pakistan's carbon footprint. Unilever's employment policies,
talent hunters around the world, represent a significant portion of the company's CSR
operations. Unilever, on the other hand, is well mindful of the legal responsibilities that come
with such policies. This is why we haven't come across any allegations of exploitation leveled
against the company.
Unilever is the driving force behind many CSR initiatives in Pakistan, despite the fact that many
people are ignorant of this. You may recall an advertising named MadadaikIbadat as an
example of this. In this campaign, a well‐known detergent company (Surf Excel) was a main
partner. This initiative is part of Unilever's Sustainable Living Plan, and it's still going
strong.(Unknown, 2017)
Discussing the second CSR activity by Pakistan Telecommunication Company Limited has also
set some social and environmental targets for the country. In Pakistan, the well‐known
telecommunications corporation successfully engages in a variety of CSR operations. PTCL's
main emphasis is on wellness, education, the environment, and community service programs.
The tree‐plantation drives at PTCL represent the commitment of company to environmental
preservation. There are also children's services aimed at strengthening their character and
preparing them to be better people. Any company's human resource management reflects how
its workers are handled.
PTCL is also involved in a number of other CSR initiatives in Pakistan. These contain medical
services for employees, blood donation drives and post‐retirement beneficial arrangements.
At the medical camp, PTCL doctors and dentists, assisted by required paramedical staff and
ambulance service, provide OPD coverage, medical record updates, dental examinations, blood
grouping and screening, and emergency assistance, including minor surgical procedures.
Blood donation is the most valuable of all donations and ensuring a safe blood supply is a
worldwide issue. Unfortunately, Pakistan still has a serious shortage of blood donors. In light of
this hopeless situation, PTCL organized a national Blood Donation Drive under its Razakaar
Program putting together 9,726 charitable donors from around the country and giving
thousands of deserving people a chance to survive.
PTCL set up 100 camps throughout the country, from Khyber to Mehran, for its staff, their
families, and community partners to participate in the largest blood donation drive of the
year.(PTCL, 2017)
Now we discuss another CSR activity in Pakistan by Coca‐Cola. Bottle of Change was a
fundraiser effort for Pakistan's largest social welfare organization, The Edhi Foundation Coca‐
Cola was the brand leader for this massive CSR initiative in Pakistan. The most remarkable
aspect of this initiative was primary focus of Coca Cola. The company has promised to match all
contributions made double during fundraise. Coca‐Cola would double all contributions
collected during the campaign, up to a total of Rs25 million, in addition to investing a major
amount on a multi‐dimensional advertising campaign for this wonderful human rights
organization.
Now in Ramadan fundraising collaboration of Coca‐Cola and Edhi Foundations is taking a major
step forward, engaging people actively and exponentially increasing the level of funding
provided to the Foundation.(COCA‐COLA PAKISTAN, 2018)
It would be unfair not to highlight the efforts of MCB bank in this CSR activity. The MCB Bank is
a market leader in the banking industry, and it recognizes its commitment to the country's
economy. The Bank's policy has always been to protect the interests of both internal and
external stakeholders by having to conform to strict regulations and good governance
standards. Under its various schemes, the Bank is still involved in providing social services.
It has completed various programs and services in the fields of education, health, the
environment, sports, social awareness, cultural promotion, and charitable organization welfare,
all while having its staff and clients in mind.(MCB, 2020)
The private sector as a whole should follow the above‐mentioned admirable contributions of
companies. In this respect, CSR strategies must be developed and applied. Hopefully, these
company’s participation in CSR activities would signal the beginning of a positive trend in the
region.
2.4 Impact of Covid‐19 in Pakistan Economy:
Pakistan's already unstable economy had just begun to stabilize before the health crisis struck.
As per economist analyses, they fear that the economy can fallout from the pandemic will
seriously disrupt the country's recovery process. In the result of covid ‐19 It is estimated that
the employment level in Pakistan will be below the baseline level of 3.86 million to 0.21 million
due the recent pandemic as we know that the textile sector plays a very important role in
Pakistan's economy in terms of employment value added and exports. It has the highest
manufacturing value added for any industry amounting to 17.5 %. These exports have been low
since the start of the COVID‐19 crisis, even with the cancellation of some orders. In 2018
Pakistan's GDP growth was around 5.8%; now it is 0.98% and is likely to decline further. The
country's fiscal deficit is almost 10% and revenues have plummeted in the past two years.
(Saleem, 2020)
The covid‐19 pandemic has forced businesses to consider factors other than shareholder value
in Pakistan. Many companies in Pakistan implement CSR activities to operate business in Covid‐
19 includes Unilever, PSO Engro Fertilizers, Philip Morris Pakistan, and banks. Though the
Federal and Provincial government authorities in Pakistan have taken many steps to control the
Coronavirus pandemic and offer all necessary socioeconomic relief to the citizens during this
lockdown, the private sector and regulatory bodies have also come forward to assist the
population in various ways. Companies were often advised to take preventive steps, maintain
strategic readiness, and reduce health threats to employees, customers, and societies as well as
to make alternative plans with customers and vendors to ensure market sustainability.
However, it is appreciable initiative from companies in Pakistan.
CHAPTER#3 ANALYSIS AND FINDINGS
ANALYSIS
3.1 Critical discussion of CSR and CSV in Pakistan
In Pakistan, where CSR has still not followed properly. It is starts to appear everywhere and
when you follow and started to believe, it seems like they are in infant stages. Apparently, in
Pakistan, there is no law related to CSR activities. However, we have seen all laws regarding
labor laws, environmental law, and many other but CSR related law doesn’t exist in Pakistan.
On the other hand, we didn’t find more work on this field of CSR in Pakistan. Furthermore, CSR
is the most important part of corporate success.
As the matter of facts, India legislation which came into force in 2013. The companies act 2013,
Indian government applied a rule of any company with revenue over 10 billion, to spend 2% on
their CSR activities. (Noreen 2017). India become the first ever country who introduced this
strategy to make it mandatory for countries to spend some part of their profits on the
philanthropic purposes. Despite the facts, no such laws exist in Pakistan and not even like to be
conducted for be next two decades at least. The implementation of this law very much needed
to grow the emerging economy. It is rather lack of seriousness by enforcement and
government. They should spread awareness in general public regarding CSR to develop the
sustainable environment. Most of the companies are not aware about the CSR activities and its
concept. They don’t even have the dedicated department to CSR activities. The small medium
businesses are mostly not aware about CSR and not take any part for the sake of social
responsibilities. However, multinational companies and other large medium businesses are
more follow Corporate Social Responsibility practices and creating shared value strategies. They
promote and published their CSR activities in newspaper, and their websites. Some of them
publish in their annual reports too.
Moreover, we tracked down that overall population doesn't know about this idea. The
consequence of absence of mindfulness is that organizations don't give a lot of consideration to
CSR and are not worried to complete them generally in light of the fact that they know that
individuals are unconcerned and unmindful of this space of corporate area. The shortfall of
mindfulness among general public of fundamental common freedoms, resident rights, and
shopper rights brings about absence of addressing by the general population and broad
communications over infringement of the above rights. (Ahmed and Ahmad 2011).
In Addition, we found that work laws have a generous presence in Pakistan, with plainly
characterized rules, suggestions and commitments for the organizations and working
environments to follow to guarantee the security of privileges of their workers. These work
laws are very extensive and are supplemented by administrative requirement associations and
unique work courts. These courts are completely capable to attempt offenses identified with
workers and work and can take perception of any such matter identified with organizations and
workers.
Other than these work laws, the Constitution of Pakistan, 1973 in its essential rights just as
article 37 ensures the presence of certain center standards of CSR, for example, work rights,
rights to affiliation, annulment of youngster work.
In the field of CSR spending on the foundation or potentially the improvement of the region
where these MNEs work, we tracked down that some administration organizations distributing
certain rules to be trailed by the organizations. Regardless, we have the CSR rules created just
as modified intermittently by the Security Exchange commission of Pakistan (SECP). The rules
are as recently referenced not restricting and organizations are supported, not bound to follow
them. These rules have set out a fundamental design of completing of CSR exercises in the
country. This association likewise delivered a Code of Corporate Governance which requires the
Top managerial staff of any organization to take measures to stay away from destructive
impacts of its exercises on the climate, what's more, to guarantee the execution of work and
other significant laws of the country in regard of exercises of its association. Be that as it may, if
there is something concrete and through which organizations can be considered responsible, it
is the agreement which they sign when they are conceded permit to work in the country. The
arrangements of these agreements are legitimately restricting upon these organizations to
follow since they are the piece of the agreement they have persistently marked. Regardless, it
has been seen that the vast majority of the organizations don't follow these arrangements and
the administrative associations which are endowed with the errand of guaranteeing that these
guidelines are satisfied and carried out in their actual letter and soul spirit.
CHAPTER#4: CONCLUSION
4.1 Conclusion:
In this research, as we see the above difficulties and scenarios regarding CSV and CSR in
Pakistan. The corporate sector must follow both things in their structure. However, the Govt. of
Pakistan takes a step and implemented a rules or policy to conduct CSR and CSV activities in
their organizational structure. They should apply the rule as we discussed in above paragraph
that how Indian Govt applied a rule that every organization who generated revenue over 10
billion, must spend 2% on their CSR activities. So, Pakistan also should take a step and
implemented this type of policy for every organization or SME business.
Lawful territory of CSR in Pakistan that leading an examination on CSR in lawful point of view
has all the earmarks of being more of sociologies’ exploration. This is halfway a direct result of
the way that CSR is all the more firmly identified with social perspectives Maybe than lawful
side (due to its non‐restricting nature) and somewhat on the grounds that CSR is Pakistan is as
yet in its newborn child stages. With government apathetic and indifferent mentality towards
CSR, the idea stays more joined with Corporate Philanthropy.
From every one of the conversations we had above, it tends to be securely reasoned that CSR,
however still in its beginning phases, is filling progressively in Pakistan. Nonetheless, the speed
of the development should be expanded in which dynamic job can be played by the public
authority and NGOs. In the event that CSR is completed appropriately in Pakistan, numerous
zones so far ignored or on the other hand unaddressed in the public space can be improved.
The legitimate side of CSR is practically non‐existent in the country. Despite the fact that there
are sure offices concerned with cutting out the principles of methodology for the execution of
CSR, no division was discovered to be appropriately encouraging and pushing corporate to
observe those principles. They have all the earmarks of being a custom to be done instead of an
objective to be accomplished. It was clear in the Supreme Court Case we talked about over that
even the standard divisions in Petroleum Ministry didn't try to constrain the organizations to
follow and satisfy the authoritative commitments of CSR regardless of being unmistakably
referenced in the award of permit and terms of agreement. The government should give regard
and consideration to this aspect of the Corporate particularly the enormous enterprises.
This study reasons that the CSR in non‐industrial countries especially with regards to Pakistan is
generous. Further, comprehension of CSR in Pakistan begins with magnanimity and closes at
local area improvement with restricted commitment. Local area esteems and charity are
profoundly esteemed and saw as friendly duty. Especially, the individuals who are working in
the public area have exceptionally restricted consciousness of CSR. UN worldwide minimal
standards have not been completely tended to in the non‐industrial countries, including
Pakistan. It has been seen that most of the public area is unconscious of UN worldwide
minimal.
The various methodologies of CSR make it wide in circle and degree. These unique approaches
of CSR if appropriately tended to by the organizations can give benefits in the structure of
monetary and social advantages. There are sure ways where the organizations can bring CSR
into training like natural concern, social consistence, business morals standards, interest in local
area, and Stakeholder association.
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