Transcript Corporate Social Responsibility & Business Strategy

Corporate Social Responsibility & Business
Strategy - a case study on the Tata group
under Mr. Ratan Tata
Research Scholar : Mahesh C. Pednekar,
JJT University, Rajasthan
Research Guide : Dr. Nishikant Jha, Associate Professor
and Co-ordinator for BAF in Thakur College of Science &
Commerce, Mumbai University
Outline And Objectives
• The Tata group has aggressively pursuing several corporate social
responsibility (CSR) initiatives in India. The case describes the
vision and mission of Tata group which places importance on CSR.
• It then examines how the group's vision is translated into action
through the various community development initiatives.
• This case focuses on issues like, how the Tata group had gone
about integrating various CSR initiatives across the group
companies, the measures it is adopting for institutionalizing the
concept and the various benchmarks adopted.
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Finally, the case examines how Tata Group is integrating CSR with
its business processes in the organization's journey towards
business excellence.
Statement of Scientific Question
Addressed.
Corporate Social responsibility and
Business Strategy are not antagonistic to
each other and a synergy between these
two objectives are good for a company's
business as well as in creating a healthy
society
Brief Description of
Methodology.
This paper is part of my PhD thesis and
the data has been collected from various
secondary sources like newspapers,
magazines and case studies
The Tata Group
• The Tata Group operates more than 80 companies ranging from
software and automobiles to steel, consumer goods and
telecommunications. With 200,000 employees across India, it is the
nation's largest private employer.
• The Tata Group is also unique in that nearly two thirds of the equity
of the parent firm, Tata Sons Ltd., is held by philanthropic trusts
endowed by Sir Dorabji Tata and Sir Ratan Tata, sons of Jamsetji
Tata, who founded the family business in the 1860s.
• These multipurpose trusts, chaired by Ratan N. Tata, include two of
the earliest and largest private grant making organizations in India.
• Through these trusts, Tata Sons gives away on average between 8
to 14 percent of its net profit every year.
CSR and The Tata Group
• In a free enterprise, the community is not just another stakeholder in
business but is in fact the very purpose of its existence."
• "Corporate Social Responsibility should be in the DNA of every
organization. Our processes should be aligned so as to benefit the
society. If society prospers, so shall the organizatio..."
• The guiding mission of the Tata group was stated by JRD Tata in
the following words: "No success or achievement in material terms
is worthwhile unless it serves the needs or interests of the country
and its people.“
• The group's mission statement states, "At the Tata group, our
purpose is to improve the quality of life of the communities we serve.
We do this through leadership in sectors of national economic
significance, to which the group brings a unique set of capabilities...
CSR and The Tata Group
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Tata initiated various labor welfare laws, like the establishment of Welfare
Department was introduced in 1917 and enforced by law in 1948 or
Maternity Benefit was introduced in 1928 and enforced by law in 1946.
Be it relief measures, rural development, health care, education and art and
culture, they have been very forthcoming..
Different Tata companies have been actively involved in various social
works.
Like Tata Consultancy Services runs an adult literacy programme, Titan has
employed 169 disabled people in blue collar workforce at Hosur, Telco is
fighting against Leprosy at Jamshedpur, Tata Chemicals runs a rural
development programme at Okhamandal and Babrala, Tata Tea's education
programme and Tata Relief Committee (TRC) which works to provide relief
at disaster affected areas.
The group's policy is to provide livelihood instead of giving money.
CSR and Business Strategy
• Since inception, the Tata group has placed equal importance on
maximizing financial returns as on fulfilling its social and
environmental responsibilities - popularly known as the triple bottom
line.
• After decades of corporate philanthropy, the efforts of the
group in recent years have been directed towards
synchronization of the Triple Bottom Line (TBL).
• Through its TBL initiative, the Tata group aimed at harmonizing
environmental factors by reducing the negative impact of its
commercial activities and initiating drives encouraging environmentfriendly practices.
• In order to build social capital in the community, the group has
got its senior management involved in social programs, and
has encouraged employees to share their skills with others and
work with community-based organizations...
Ratan Tata : Carrying The Mission Forward
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In corporate social responsibility he has given new direction and
focus to the Tata Group's disparate activities with the creation of the
Tata Council for Community Initiatives (TCCI) in 1996
A July 2004 cover story in Business Week [India] quotes an investment
banking source as noting that the company’s r challenge is to "ensure that
the Tata group's sense of social obligation doesn't collide with shareholder
value creation .
According to Ratan Tata’s view these two objectives are not
incompatible. What the company has done in their discharge of social
responsibility should be of value to their shareholders.
Their efforts result in a more prosperous country, and lead to a greater
quality of life that benefits all.
Ratan Tata : Carrying The Mission Forward
• In the early days, philanthropy was about creating
development institutions such as hospitals, and
initiatives of a nature which at the time were more about
nation building than ours are today.
• Today, the company’s philanthropic initiatives have
greater focus, for example, on creation of awareness of
things like discrimination against the girl child; on
microfinance, to get people away from moneylenders; on
water harvesting and conservation; in moving more to
small community initiatives.
• From their own grant giving, they have found that
the greatest challenge is to find appropriate,
professionally managed grantees or NGOs.
Ratan Tata : Carrying The Mission Forward
• Some of their water conservation grantees have
transformed the areas in which they are working, and
whatever they have seen there is just amazing.
• A number of their grantees have worked with villages -villages starved of water that have had no livelihoods -and with water harvesting and conservation, they've
created year-round water supply and changed the entire
fabric of these villages.
• Thanks to a partnership between the research lab of
software giant Tata Consultancy Services (TCS) and
a range of local NGOs, clean and safe drinking water
is available for the first time for thousands of
households in rural Maharashtra.
Ratan Tata : Carrying The Mission Forward
• Developed specifically for rural areas, the filter is the
result of years of research and field trials by scientists at
the Tata Research Development and Design Centre
(TRDDC), the Pune-based R&D division of TCS.
• "They've been trying to bridge the divide between the IT
world and the rest of India, and this has come out of that
effort," explains Ratan N. Tata.
• While the connection between information
technology and low-tech water filters may not be
obvious, the project exemplifies Tata philanthropy's
emphasis on rural communities and water
conservation and is squarely in keeping with
TRDDC's mission to use research to transform lives .
TBEM - Striving for Business
Excellence
• To ensure that Tata group companies achieved high
levels of business excellence, Tata Quality Management
Services (TQMS - a division of Tata Sons) had been
entrusted with the task of institutionalizing the Tata
Business Excellence Model (TBEM).
• The role of TQMS includes setting up of standards of
business excellence using the TBEM framework and
assisting group companies in achieving those
established standards.
• The TBEM provides each company with an outline to
help it improve business performance and attain
higher levels of efficiency.
Recognition Of CSR
• The different group companies have received several
awards for their fulfillment of social responsibility.
• For instance, TISCO was awarded 'The Energy
Research Institute (TERI) award for Corporate Social
Responsibility (CSR)' for the fiscal year 2002-03 in
recognition of its corporate citizenship and sustainability
initiatives.
• As the only Indian company trying to put into practice the
Global Compact principles on human rights, labor and
environment, TISCO was also conferred the Global
Business Coalition Award in 2003 for its efforts in
spreading awareness about HIV/AIDS...
Conclusion
• Ratan Tata says his company is not driven to grow
“over everybody’s dead bodies.”
• Some 66 percent of the profits of its investment arm,
Tata Sons, go to charity, and executives make clear
they have no intention of relinquishing control to
Wall Street.
• At Tata, “corporate social responsibility,” to use the
Western buzzword, has real money behind it.