Corporate Social Responsibility and Consumer Protection in the Era of Globalisation

Introduction

The consumer in his capacity as a spokesman of the request for goods has become a real partner on the market, whose occupied positions on the market are consolidating with the development of society. The sustainable development, the welfare of the society cannot be achieved only by maximizing short-term profits by traders, but rather through their responsible behaviour. The economic growths, the increase of the competitiveness, are increasingly linked to protecting the environment, promoting social responsibility and consumer interests. According to market needs, the main function of a company is to create value through the production of goods and services, generating, profit for the owners/stockholders. Social and marker pressures have led to a change of the values and the horizons to which the market agents are related. Purchasing behaviour of consumers increasingly affects more businesses, organizations, bodies and institutions; therefore, an increasingly great attention is paid to the consumer.

Comparative Analysis of CSR and Consumer in Globalization

Although there is strong support of CSR across all countries studied, there are distinct differences in market-specific consumer attitudes and behaviours. In some cases, CSR is a result of various social, environmental and economic pressures while in other cases, it is primarily a strategy to divert attention away from the negative social and environmental impacts. It enables the company to leverage its products, employee strength, networks and profits and up to some extent to create a sustainable change for marginalized communities. Despite certain criticisms on the CSR activities, more companies in the world are inclining their strategies towards corporate social responsibility. The CSR Executives have the task of reconciling the various programs, quantifying their benefits, or at least sketching a logical connection to the business, and securing the support of business line counterparts.

Globalization has created new business opportunities, but has led to an increase in organizational complexity and a continuous expansion of business activities abroad. This has resulted in an imperative to assume new responsibilities on a global scale, especially for operations in developing countries. The Treaty of the European Communities enthrones consumers’ right to information. Information should be accurate in order to be useful and accessible for consumers. Since they express a growing preference for socially and environmentally responsible products and services, their access to relevant information is crucial and helps them make correct choices. Such data exist in different forms and from various sources, including those offered by the producer, consumer organizations and independently checked labels and certificates.

Legal Provision for the Interest of Consumer

A number of laws have been passed by the Government of India over the years to protect the interests of consumers. The objectives of these laws are as follows

1.      The Sale of Goods Act 1930: This act provides safeguard and relief to customers in case goods are not complying with the expressed conditions and warranty.

2.      Agricultural Products (Grading and Marketing) Act, 1937: This Act provides for grading and certifying the quality standard of agricultural commodities which are allowed to be stamped with AGMARK seal of the Agricultural Marketing Department of the Government.

3.      Prevention of food adulteration Act, 1954- This Act provides for severe punishment for adulteration of food articles. In case of sale of adulterated food which is injurious to health and likely to cause death, life imprisonment with a minimum fine of Rs 3000 may be payable. Food inspectors are appointed and they have powers to randomly check and analyse samples. Penalties are also imposed for offences committed by persons with regard to manufacture, import, storage, sale and distribution of adulterated food articles.

4.      Essential Commodities Act, 1955: Under this Act, the government has power to declare any commodity as essential in the public interest. The Government can thereby control the production, supply and distribution of the trading of such commodities. It also provides for action against the anti-social activities of the profiteers, hoarders and black marketers.

Conclusion

Consumers are very important stakeholders for companies and the success of a company’s CSR policy is to a large extent determined by these consumers. Hence, understanding them is critical. Part of understanding these customers relates to trying to find out why they buy from companies which incorporate social responsibilities into their business practices. It is believed that consumers only support firms that engage in CSR, if they receive some kind of value from the exchange. Consumers usually don’t view CSR as one overall impression of a firm, but that they look instead to how each CSR activity can add to their overall value proposition when making a purchase. This seems to indicate that consumers are still more motivated by self-interest than by the interest of society.

Arpit Sharma

Assistant Professor of Law

JEMTEC School of Law

Greater Noida