The 21st Century Businesses Marketing Essay

Abstract

In the world we are living in, which is the 21st Century, businesses around the world has only one aim which is to become leader in the world of business, to grow and make profit, then at a certain point in time, the business may be dominated and bought up by a big corporate. Mullin, (1999) states that, “any Business enterprise ceteris paribus is to make profit and minimise losses, save a charity. Hence, the activities and the management of the people is being directed towards an end, towards meeting certain goals”. However, some other businesses stand out as they also operate not only to be big but also to be great. Corporate Social Responsibilities (CSR), are blooming in most businesses today, they structure their business to fit in the dynamic environment in terms of society, businesses, finance and environment. Businesses today use CSR as a major tool to promote their company by advertising what the company can offer to the society and to the world. Thus said, the purpose of this study is to examine if Tata’s Group CSR does fit in the 21st century.

Content Page No

Abstract

1.1 Introduction 4

1.2 Corporate social responsibility 4

1.3 Principles of Corporate Social Responsibilities 5

1.4 Theories into practise 6

1.5 Tata CSR as strategic initiative 7

1.6 Tata Community development initiatives 8

1.7 Some CSR practices in companies 8

1.8 Tata Core Values 10

1.9 Tata’s Business sector 11

2.0 Tata’s trust: A sustainable ray of hope 13

2.1 Tata’s commitment 13

2.2 Conclusion 13

References 15-19

Title

Tata Group Corporate Social Responsibility (CSR) in the 21st century

1.1 Introduction

TATA group was first established back in 1868 when, late Mr Jamsetji Nusserwanji Tata started his trading business dealing of Opium in Mumbai which followed by the opening of the Taj Mahal Hotel in Bombay. After the death of Mr Jamsetji, his son, Sir Dorab Tata took over as chairperson in 1904. Under the rule of Sir Dorab, the business developed into diverse production, namely, into the steel production and the hydroelectric power generation. After the death of Sir Dorab, Mr Nowroji Saklatwala succeeded him in 1934 until 1938 and at that point, Mr J.R.D Tata took over and during his time, he took the initiatives of developing the business into Tata chemicals, Tata industries, Tata tea, Tata consultancies and Titan industries. Mr Ratan Tata, appointed in 1991, is currently the chairperson (www.tata.com).

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1.2 Corporate social responsibility

Despite the fact that CSR has been variously defined, all these recent definitions have a common theme. They all state that modern business must recognise the economic, social, and environmental impact of their operations/actions on both their stakeholders and the natural environment, or requires them to minimise the address effects and maximises the consequential benefits of their actions on stakeholders and the environment (Samuel O. Idowu et al, 2009).

CSR is gradually becoming a leading issue in business. A growing number of companies embrace the concept and feels the need to make clear what it actually means. They take a variety of initiatives all aimed at making sense of CSR. This also holds for 18 Dutch companies that joined the programme of the Dutch National Initiative for Sustainable Development (NIDO) called “from financial to sustainable profit” (Cramer, 2003).

The ethics of CSR disclosure have historically been some of the most difficult to reconcile with earnings expectations and activist demands (Brown and Haas, 1974; Filios, 1984, 1986: Gelb and Strawser, 2001: Robertson and Nicholson, 1996). Research indicates that almost three quarters of American investors consider social responsibilities when they make investment decisions (Companies fail, 2001). Every company must put its best foot forward at all time in advertisement and reports to remain competitive in the market place. The problem that faces many companies engaging public dialogue are how ethically, legally and effectively disclosed information while maintaining a positive image (Argenti and Forman, 2002).

1.3 Principles of Corporate Social Responsibilities

David Crowther & Galer Aras, (2010) stated in their research that, “there are three main principles of CSR, respectively they are, Transparency, Sustainability and Accounting”.

As the word sustainability suggests, it is all about the decisions taken at present by a company and its impact on the future, David Crowther & Galer Aras (2010). All companies in business look for the ability to sustain in the dynamic economy. For the improvement towards the society, firms should make a tremendous attempt to invest in technology and in development towards the society. Zwetsloot (2003) states that, “every company needs to continuously invest in technology and be actively involved in continuous improvements and innovations to be able to have sustainable development”. 

There is a great importance on the principled outlook of the company and this requires the demands of the company to be responsible to its in-house customer’s i.e. internal and external employees and the stakeholders of the company. All businesses attempted to maximise profits as their first and foremost goal, in this changing world they learn to focus on the moral and the social factors also in the same way and ensure that they maintain lucidity in their accounting systems and also the policies that they pursue in the companies.

Crowther, David (2005) states that, “ethics is a natural and structured process of acting in line with the moral judgments, standards and rules”. Companies nowadays need to go after business moral values and need to preserve a certain standard, as the companies who do not follow ethics and do not keep up honesty would be far from achieving their aim and keeping their stakeholders satisfied, Aras (2006).

1.4 Theories into practise

According to Mallen Baker, CSR is about how companies handle the business processes to bring into being an in general an affirmative and positive impact on society. There are two aspects of operations that companies need to respond to, they are: the quality of their management and the magnitude of their impact on the world in the different areas. Based on his theories, my investigation is too, if Tata group CSR does fit into his framework as stated below.

The quality of running an organisation, both in regard towards people and processes illustrated in the inner circle and outside, the stakeholders are smart an ever-increasing interest in the doings of the company. As illustrated all main onlookers such as the government, NGOs, Local communities etc., are actually looking into what the company is doing, if the outcome is good or bad, in terms of its product and services, in terms of its repercussion on the environment and on its local communities. Even to the extent to know the company’s treatment towards its workforce and training and development offered to them. From different stakeholders, it is the fiscal analysts who are primarily focused, also as past financial performance on excellence of management this adds to the tribute, which is a sign of possible future performance.

Tata group, which also focuses on CSR of different genre, can definitely fit in the framework as their main core values states integrity, understanding, excellence, unity and responsibility, elaborated in detail later. As Barett (2003), argued that organisation could operate successfully if they need to demonstrate two things:

A strong alignment between the personal values of employees, the values of the current culture, and the values employees considered necessary for a high-performance organisation; and

That the current culture of the organisation covered the full spectrum of the seven levels of consciousness which is survival, belonging, self esteem, transformation, cohesion, inclusion and unity.

1.5 Tata CSR as strategic initiative

Tata as long accepted that CSR makes business sense. JN Tata (1895)stated that ,” we do not claim to be more unselfish, more generous or more philanthropic than others, but we think we started on sound and straightforward business principles considering the interest of the shareholders, our own and the health and welfare of our employees, the sure foundation of prosperity.” Convey (1999), suggests that, people are not just resources or assets, not just economic, social or psychological beings; they are whole beings. Tata group for a long time now has placed equal importance on maximising financial return as on gratifying its social and environmental tasks.

Compare to the 1895 to now Tata’s has been directed towards synchronisation of the Triple Bottom Line (TBL). Through TBL initiative, it is aimed at harmonising ecological factors by trying to reduce the bad and negative impact of its business-related activities and initiating and encouraging environmental-friendly practices. With Tata strategy to integrate global assets, it enhances its raw materials security, expand the low cost manufacturing base in India and diversify into logistic could take Tata into an era of superior cost and supply chain dynamics. Tata is setting up new green field project in Orissa, Chhattisgarh and Jharkhand states, which are rich in natural resources.

1.6 Tata Community development initiatives

In regards to experience in the area of CSR, Tata group is involved and play a very important role in building the nation and investing in socioeconomic development since the early 1900s. A study conducted by the website www.indianngos.com publicised that Tata’s spent Rs 1.5 billion on community development and social services during the financial year 2001-02 the highest by any company house in India. Even when the economic conditions were hostile and unfavourable, as in the late 1990s, the fiscal obligation of the group towards social activities kept escalating, from Rs.670 million in 1997 to 1998 to Rs 1.36 billion in 1999 to 2000. A distinctive characteristic of the group is 63 percentage of the equity capital of the parent company Tata Sons Ltd., is held by Tata trust (Ref.: www.tata.com).

1.7 Some CSR practices in companies

Maintaining quality employees

Managing cost

Brand building

Tax benefit

Investor relations

Government pressure

Maintaining quality employees: In the dynamic world we are living in, it has turned out to be an important reason for all the companies of any size and type to keep hold of their employees and continue a certain quality of employees. Challenging, most of the companies are discovering and finding it hard to handle the decline rate of companies, as employees are moving towards companies that have a good social vision and are dynamically involved for the good of the society. According to International Business Report (IBR) in 2008, it was concluded that most of the companies stated, found out that employee retention is the major driver for CSR activities.

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Management Cost: It is essential for every country to handle its expenses and try to diminish costs as much as possible to remain competitive. One way of maintaining and keeping the company costs down is to ensure that good quality standard is maintained and that the standard operating procedures maintained. In today’s dynamic world, managing and controlling the increase of carbon dioxide release in the environment would also put away a big cost to the country.

Brand name Building: It is fascinating to note that trade name building is a drive, which is more important that employment and cost management as it comes after them for most of the companies. This means that companies are working hard to move towards principled practices for employee welfare and also towards cost management. Giving them, more meaningful reason than public image and trade name building of the company is primary, and other company should follow the same trend. A distinct factor is that as the companies get bigger and move towards international markets, brand name and public belief will be more important than small companies will.

Tax advantage: Many countries trust and consider indulging in CSR actions for tax support. Many companies around the world, who would like to be renown and publicly listed, have to maintain lucidity and transparency in their dealings and in their taxations and should maintain a benchmark employment practices. In Brazil, it is necessary for every business and company, which is desired by most, to be publicly listed.

Investor relations: it is of prime importance to maintain customer and investor’s good relationship and in an attempt to do so these companies fulfil by the principled, moral, and ethical business practices. It is well known that Vietnamn relationship with investors is of prime importance, as compare to other countries they treat their investors with great respect and consideration. Most of the promising countries like India, Philippines, Brazil, and Turkey are now giving importance to investor relations.

Government force: Countries around the world are realising the significance and magnitude of air pollution and pollution in general which are caused by big and small companies and the amount of devastation created and produced to the world’s fauna and flora. Government is also stepping in act in different ways to tackle and is captivating the idea to reduce the carbon release from the companies and engage themselves in activities that annul their effect of carbon emission. (www.articlesbase.com)

1.8 Tata Core Values

The Tata name is an only one of its kind asset indicating guidance with trust. Leveraging this asset to improve group synergy and fitting in globally competitive chosen route to a sustainable growth and long-term success.

Tata International’s values are:

Integrity: We will conduct our business fairly, with sincerity and transparency. Everything performed must stand out the investigation of public inspection.

Understanding: We will be helpful, show esteem, empathy and kindness for our colleagues and customers around the globe, which will always work as an advantage of the communities we serve.

Excellence: We will continuously endeavour to achieve the uppermost possible standards in our everyday work and in the excellence of the goods and services, we provide.

Unity: Working cohesively with our colleagues across the group and with our customers and partners around the world, building strong relationships based on open-mindedness, understanding and mutual cooperation.

Responsibility: We will continue to be responsible, responsive to the countries, communities and environments in which we work, always ensuring that what comes from the people goes back to the people many times over (www.tata.com).

In the up-and-coming debate over the tasks faced by corporations in an increasingly globalised and competitive marketplace the idea of ‘Corporate Social Responsibility’ (CSR) is often presented as being at odds with the profitability of business operations. Environmentalists for investing in more expensive, but ‘greener’ operating practices, for example, approve corporations, while shareholders is being left to worsen. The Tata Group’s CSR initiatives must not be viewed as costs, but as investments, which serve as the foundation of its competitive advantage and long-term profitability. Through its support for education, health and wellness, and other social programs, Tata has earned praise as a responsible corporation committed to giving back to the communities in which it operates. From a purely altruistic standpoint, these programs serve as the foundation for community richness – creating stronger and better-educated workforces, higher median income, and providing environmental stewardship (Greenwald, Bruce and Kahn, Judd, 2005).

1.9 Tata’s Business sector

Information technology and communication

Tata communication portfolio of services solutions, and its infrastructure and capabilities in the new growth markets of Asia and Africa have enabled Tata create growth opportunities even in difficult market conditions where all seems unstable. To keep the pace with customer needs and stay in competition requires instance innovation, and also to identify and invest in those growth markets.

Engineering products and services

Tata plays a very important role in international marketing and global sourcing of engineering products. It deals with operations in automobiles, auto parts, and a variety of other engineering products and services. For them to fit in the changing environment they focus on new idea, innovation for example the introduction of their new automobile Tata Nano, just on the market they are scrapping million, due to the fact that it is environmental friendly and also safe. Customers are gaining more and more power, their demand towards tailored product and services are adding value to the company as they are meeting their needs.

Materials

Also prominent for their global leadership in the material business sector, Tata’s operation in steel and composite is one of their pillars, for them to keep in business and determine to be a major global steel company. Tata plans to improve its capacity, diverse through organic and investment. Tata steel CSR extend support to the economically deprived by reinforcement and empowering them with skill and knowledge.

Services

Tata group has pervasive interest in the hospitality business, insurance, finance and other services, for them to remain competitive in the world of today, they emphasise on delivering the best customer service and care possible to retain its customers and investors. Focus on respect, health, freedom, harmony and security. Also the need to harness aspiration and diminish disparities is of prime importance.

Energy

In terms of energy, Tata invested in many products and service range such as hot water pump for residential and commercial application. With the intention to provide reliable and cost effective solar cooker, systems for lighting homes, gardens and streets and other solar water heating systems. Tata CSR towards energy is to seek to educate customers and the public to reduce energy wastage and to increase energy efficiency. Sustainability in regards to reducing emissions, energy conservation is also an important part of lessening climate change.

Consumer products

To sustain development, companies are making serious effort. Tata’s CSR consumer product which ranges from tea, ceramic, coffee etc…. emphasise a lot of consumer green value. This means their packaging is biodegradable and environmental friendly. Moreover, Tata encourage, promote awareness on environmental issues so that consumers are aware, and take full responsibility by contributing to safeguard the environment.

Chemicals

Globally, Tata operations in the US and the UK have performed well in the constant change in the environment. Tata have also improved their cost position by the timely closure of the Netherlands facility, which was proving to be a drain on them. their main problem is in Kenya where Tata continue to face a challenging situation on the market front. Their operations in Morocco were impacted in the first half, but the situation has now stabilised and is improving.

One of the key strategic drivers of Tata is to try to create within Tata Chemicals, an environment for innovation and learning through diversity and teamwork. Tata value diversity as strength and this has helped to integrate their acquisitions.

Tata Chemical fitness strategy is to shape its businesses so that they have less volatility and greater identity. In addition, they will begin to address areas beyond food, especially in energy, environment, water and wellness.

2.0 Tata’s trust

Tata’s trust mainly known as The Sir Dorabji Tata Trust, kept the family tradition of transcending communal and religious barriers, their main deed is towards the establishment, safeguarding and support of schools, educational institutions and hospitals, the relief of distress, the progression of learning, etc.. Tata’s trust resulted in the creation of four major institutions because India with 70% of the population below poverty line, trustees concluded to consider demands for individual assistance. Hence the creation of The Institute of Social Science, The Tata Memorial Centre, The Tata Institute of Fundamental Research and The national centre for the Performing Arts.

2.1 Tata’s commitment

Tata commitment towards community initiatives is to great embrace in term of health, education, art, sport and much more. In fact, India is very well-known for its capabilities building science and technology, a way of giving back to society. The real input is to enable sustainability development, as such empower people, educate them, give them instrument of income which brings a feeling of self esteem and dignity towards a reason to live. Another commitment is towards environment and ecological issues. Tata emphasis on preserving and regenerating the environment, for example after a project is undertaken, the surrounding areas and facilities are focused on making it better as it was prior to the project.

Causes of deforestation, the rise in the sea level, the meltdown of the north pole, the climate change, new viruses are being discovered. If all business around the world was acting as Tata does, the world will not suffer as such, the flora, fauna, the global impact on the world would not be as drastic as it is.

2.2 Conclusion

Global fitness in the case of Corporate Social responsibilities of Tata in today’s world has proved to fit in the global dynamism of the society. As developed by J Rayment (2007), an easy acronym to remember ‘ASK SIR L’ will broaden the view of many organisations out there who are still striving to fit in the world of today. As described by J Rayment if all companies could ‘ASK’ appreciate that a problem exist in the running of their business, where the specific in term of scope and scale, they try to identify the problem. Then ‘SIR’, solution generation and selection, implementation of management and control, review, feedback loop to see if the problem was solved and finally ‘L’ learn to improve process. It is very straightforward and understandable. Reave (2005) highlighted some common practical behaviours that were found to impact on leadership success, and which he labelled as spiritual practices. These included integrity, honesty, humility, and respect for others, fair treatment, caring, showing concern and listening. If Tata is able to sustain and fit in this changing world, these behaviours above were adapted.