Final Draft

Letter of Transmittal
Date: 30th August, 2009 Dr. Md Khasro Miah Faculty Member School of Business North South University
Dear Sir, Hereby I would like to submit to you the report and analysis on Effective HRM & CSR policies and practices in gaining Sustainable Competitive Advantage at BAT Bangladesh. Working on this project was a very interesting experience and I tried my best to cover all the necessary parts of the assigned project. Other than that, this project has given me an opportunity to work with SPSS, which has given me a tremendous outlook on certain issues and factors in organizations of this industry. I will be available for any clarification and modification that may be required. I would like to thank you for being helpful all the time, and welcoming me to your office as it has given me the prospect of making this even a better project. Sincerely yours,
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh
ACKNOWLEDGEMENT
I would like to thank, my faculty advisor Dr. Md Khasro Miah, for his generous cooperation and constant guidance that made me really confident about the desired outcome of my internship project. I am grateful to Nasira Mansoor, Corporate Social Responsibility Manager British American Tobacco Bangladesh for her invaluable support and guidance that led to the successful completion of my internship project. Finally, thanks to the whole CORA team of British American Tobacco Bangladesh Ltd. was very much helpful in providing me with all the necessary support that I needed during my organizational attachment.
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Abstract
The paper aims to look at the CSR & HRM practices and policies at British American Tobacco Bangladesh and how it contributes to the quality of life of their employees, the local community and society at large and how it has a positive effect on Sustainable Competitive Advantage. This is accomplished by developing and testing a model which includes (Motivation, Employee engagement, Employee retention, corporate citizenship, and Employee commitment) as mediating variables between CSR and HRM practices and sustainable competitive advantage. This relationship has been empirically investigated. The data has been analyzed using SPSS. The study provides some support between the variables and the outcomes as a mediating variable. The study provides some result which indicates Afforestation strategy of CSR has a significant negative relationship with sustainable competitive advantage; free primary health care also has a negative relationship but is not significant. Community services, Training and development, workers participation and industrial relation is positively related but does not have a significant relationship with sustainable competitive advantage, whereas compensation and benefits is negatively related but does not have a significant relationship. This relationship has been discussed later in this study and provides us some important particulars.
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Executive Summary
Corporate social responsibility (CSR) means a commitment by a company to manage its roles in a society in a responsible and sustainable manner. Like many other organizarions BAT Bangladesh believes that sustainable business success and shareholder value cannot be achieved solely through maximizing short-term profits, but instead through marketoriented yet responsible behavior. BAT Bangladesh wants to pursue the goal of sustainable development, thus their CSR activities are designed to contribute and improve the economic, social and environmental sustainability of the country. Their HRM policies and practices are unique which gives them a competitive advantage over others. The Vision that motivates BATB employees and drives their operation is the desire to extend the market leadership through world class performance across all areas of BATB business. Their corporate culture is inimitable and is driven by their strong guiding Principles. They are known to be the employer of choice for their HRM policies and practices. The HR functions within BATB are Organizational Development &Change, Reward and Employee Relations. The paper aims to look at the CSR & HRM practices and policies at British American Tobacco Bangladesh and how it contributes to the quality of life of their employees, the local community and society at large and how it has a positive effect on Sustainable Competitive Advantage. For this analysis, I have come up with survey questionnaire so to extract information from the respondents and later I also have compared our hypothesis which is the positive perception and also the application of the dimensions of HRM & CSR for the betterment of the organizations sustainable competitive advantage.
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Introduction
Todays global businesses face a daunting challenge achieve and sustain competitive advantage while empowering customers and communities to grow and prosper. Corporate Social Responsibility (CSR) is an organizations obligation to consider the interests of their customers, employees, shareholders, communities, and the ecology and to consider the social and environmental consequences of their business activities. (Francis, A. and P. Tharakan1989). By integrating CSR into core business processes and stakeholder management, organizations can achieve the ultimate goal of creating both social value and corporate value. CSR enhances competitive advantage by improving productivity and quality, reputation and brand image, recruiting new employees, understanding consumers and customer loyalty, cost control and efficiency, attraction of investors, regulatory benefits. Companies, who successfully address all areas of corporate citizenship and gain business leverage whilst developing the potential of local communities, will ultimately become the corporate leaders of the future. Corporate social responsibility is a commitment to improve community well-being through discretionary business practices and contribution of corporate resources (Kotler, Nancy, 2005).The ongoing globalization process implicates the enterprises from industrialized countries are paid to greater public attention. The public expects from them to take ethical and social responsibility. The world Business Council for Sustainable Development defines corporate responsibility as the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce, their families and the local community and society at large.
(Mohammad Ataul Hoque, 2008). Corporate responsibility is achieved when a

business adapts all of its practices to ensure that it operates in ways that meet, or exceed the ethical, legal, commercial and public expectations that society has of business. To be considered effective, corporate responsibility must be an integrated part of day to day Research Report 5
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh business, engaging all stakeholders and including strategies to support individual managers to make socially responsible decisions, conform to ethical behavior and obey the law (Welford, R. 2003). Corporate social responsibility is a very hard to engage, but sometimes even harder to communicate to the companies stakeholders. Many companies are aware they need to operate in a socially responsible way and if they implement CSR properly it will lead to profitability. Corporate responsibility lies at the heart of the decisions you make in ordinary business activities. The trust that people have in you as a company is critical (Harrington 2005). But CSR is more than using clear technology or pay some donations its more about sustainability. At the same time, as companies engage in initiatives that support corporate social responsibility, they should communicate about these initiatives in their marketing and public relations effort. CSR is generally associated with positive events, and as such companies are inclined to communicate about their good deeds to influence public opinion and enhance their corporate reputation (Morsing, 2005). Another issue which can be linked to sustainable competitive advantage is the Strategic Human Resource Management which is the process of linking the human resource function with the strategic objectives of the organization in order to improve performance. This means Strategic human resource management can be viewed similar to the pattern of Human Resource management and activities which is used in an integrated way along with the companys long term business and corporate strategy to achieve its goal. As we know that Strategic Human Resource Management is a new evolving concept in our todays world but its yet to be developed a lot because most of the organizations are still quite backward in terms of realizing the need for strategic HRM in their organization. According to the present condition in the context of Bangladeshi firms, strategic human resource management is completely debut or even some organizations are alienated to this term and its contribution to companys competitive advantage in the long run (Jackson, S. E. & Schuler, R. S. 2003).
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It is known that the human resource management is now a flourishing area for all the organizations in order to focus for its long term objectives. Therefore, linking HRM functions those are compensation, recruitment and selection, training and development, performance management and employee relationship, with companys long term strategic accomplishment is profitable indeed because if the HRM functions can be established properly then it is possible to retain and motivate the intangible asset of the company which is the human (employees) and it will create positive consequence in the companys long run sustainability (Lengnick-Hall, C.A. and Lengnick-Hall, M.L, 1988). In this research report I have tried to determine how Corporate social responsibility and strategic human resource management helps in gaining sustainable competitive advantage in a firms long run, we have tried to show the significance of CSR practices and policies and strategic human resource management and its consequence in the firms betterment and also tried to prove my logic correct by analyzing the present HR and CSR system of the British American Tobacco Bangladesh. For this analysis, I have come up with survey questionnaire so extract information from the respondents which is the HR people of the BAT and later I also have compared my hypothesis which is the positive perception and also the application of the dimensions of strategic HRM for the betterment of the organizations sustainable competitive advantage. I have also searched to know whether these firms used to apply strategic HRM to building their companies sustainable competitive advantage. The purpose of the report is to know the present condition of CSR policies and Practice and strategic human resource management in BAT Bangladesh and on the basis of my findings I will provide my recommendations on these issues and how it can be applied to gain sustainable competitive advantage.
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Chapter 1
Industry Overview
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1.1 Tobacco Industry and Environment

The main cigarette manufacturers today are: British American Tobacco Bangladesh Dhaka Tobacco Industries Abul Khair Tobacco Nasir Tobacco Azizudin Industries and New Age Tobacco. The main biri manufacturers are: Akij Biri Abul Biri Nasir Biri Karikar Biri Aziz Biri and Hundreds of local biri manufacturers. At the moment, there are two main tobacco industry associations i.e. Bangladesh Cigarette Manufacturers Association (BCMA) and Bangladesh Biri Manufacturers Association (BBMA) representing the industry. Today, the market is estimated to be 64.2 billion sticks of biri and 51.8 billion sticks of machine manufactured cigarettes. Biri overtook cigarettes as the more popular smoked product in 1979. However, the market for biri has been on a declining volume trend since 2003. This reflects the switch by consumers due to social pressure, urbanization, literacy rate, economic growth and awareness by consumers. The market has a high International Brand share (18.2%).
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1.2 Competitive Scenario

In May 2008, Philip Morris International launched both full flavored and light variants of Marlboro brand cigarettes in different markets of Dhaka. Dhaka Tobacco Industries is manufacturing and distributing the brand. BAT Bangladesh and Dhaka Tobacco Industries together hold more than 80% of the cigarette market share. Tobacco products are distributed either by manufacturers themselves, third party distributors or wholesalers. The sales and distribution effort requires a large number of field employees and agents because they have to serve about 880,000 individual retail outlets throughout Bangladesh with a growth of 10% per annum. The number of retail outlets is estimated to be growing by about 8% a year. The proliferation of retail outlets is mainly due to the ease of entry and the low capital requirement. Many of these outlets operate on limited capital and are unable to purchase quantities beyond their immediate daily sales. The high number of retail outlets has created a stick market and consequently imposed more frequent sales visits compared to other similar businesses.
1.3 Smoking Incidence

21% of the population in Bangladesh is made up of adult males and 58% of them consume tobacco products. Cigarette and biri are two popular smoking tobacco products with an incidence of 23% and 21% respectively (inclusive of those who consume both products). Daily incidence of cigarette consumption is 9 sticks.
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1.4 Tobacco Regulation

Bangladesh was the first country in South-East Asia to sign the Framework Convention on Tobacco Control (FCTC) in June 2003 and ratified the FCTC on 14 June 2004. The Government of Bangladesh enacted the Smoking and Using of Tobacco Products (Control) Act, 2005 on 26 March 2005 and the Smoking and Using of Tobacco Products (Control) Rules, 2006 were published on 29 May 2006, providing guidelines on advertisements, health warning requirements and public place smoking.
Key highlights of the current legislation include: Package - 30% (of the total surface area of the pack) text only Health Warning (HW) in white with black background or vice versa; to be placed on the front and back panel of the pack. Graphic HWs are not required. Place - Smoking is prohibited in public places and public vehicles. However, it is allowed within designated smoking areas. Although the law allows for smoking in HoReCas, many have voluntarily banned smoking in their premises. Promotion - Bans on advertisement on TV, radio, print media, billboard and cinema. All sponsorships under tobacco brands are also banned. Product sampling and sponsorship under tobacco brands are prohibited. Restrictions apply for one to one direct marketing and communication at point of sale. Purchase No person under 16 years is allowed to buy or consume cigarettes. However age verification is not mandatory for purchasing tobacco. Automatic vending machines are banned. Product - There is no requirement to publish or print TAR or nicotine.
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1.5 Tobacco Taxation

Bangladesh has a tiered ad valorem tax regime for cigarette and biri. The tobacco industry contributed approximately 30.5% of Governments revenue in FY 2007-2008. Cigarette taxes include Value Added Tax (VAT) and Supplementary Duty both are imposed on retail price printed on the packs. Taxation rate is comparatively lower at the bottom end of cigarette and for biri, allowing low-priced brands to maintain their prices and restricting consumer up trading to international brands. BAT Bangladesh contributed Taka 28.28 billion (US$ 415 million) to the Governments revenue in FY 2007-2008 as VAT and Supplementary Duty. On June 2008, a new duty structure was announced by the Government following an industry proposal as follows: (a) Locally Manufactured Cigarettes SD 57% VAT 15% Total 72%
MRP per 10 cigarettes Premium Segment + any price outside the defined price slabs From BDT 41.00 above High Segment From BDT 21.00 28.00 Medium Segment From BDT 13.25 14.25 Low Segment From BDT 6.50 7.50
55% 52%
15% 15%
70% 67%
32%
15%
47%
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(b)
Imported Cigarettes Import Value SD 350% Import Duty 25% Total 375%
(c)
Biri MRP per 25 sticks BDT 3.1579 SD 20% VAT 15% Total 35%
1.6 Cigarette Pricing

In 2007, the cigarette industry saw its overall value eroded by the continued expansion of the market at the bottom end. The movement started in 2006 with the success of brands sold within the Low Segment that led to other manufacturers to join in the fray. Many manufacturers were forced to compete within the segment or risk losing their own volumes due to consumers trading down from Medium Segment to Low Segment brands. The most successful brands in the Low Segment are Sheikh and Sheikh White which have followed a continuous growth path in 2008 and have captured an estimated 16.6% of the volume of the entire cigarette market, and 46.3% of the volume within the low segment itself in the Q4 2008. Due to the inherent characteristics of an ad valorem system, any reduction in the overall value of the market, such that has been brought about by the growth of the Low Segment, is detrimental to overall amount of revenue collection. The growing volume of the Low Segment, from 22% in Q1 2006 to over 42.2% in Q4 2008, comes at the expense of the volume of the other segments. High Segment declined from 18.0% to 15.2%, Medium Segment declined from 54.6% to 36.1% and due to volume growth the Premium Segment enjoyed growth from 5.8% to 6.5%. The growth of the Low Segment is also dragging down both the volume and tax revenue contribution from Medium, High and Premium Segments. The trend is a result of the market which is highly sensitive to price. The tax rates which affect prices act as cues for consumers in their spending patterns.
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Price Slab (Taka) Premium 41+
SD + VAT 72%
Brands
Pack Price (Taka) 82.00 52.00
High
21.00 28.00
70% 43.00
Medium
26.50 13.25 14.25 67% 13.25 15.00 6.50 7.50 47% 7.50
Low
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Chapter 2
Organizational Overview
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2.1 The History of BAT

British American Tobacco has been in business for more than 100 years, trading through the turbulence of wars, revolutions and nationalizations as well as all the controversy surrounding smoking The business was formed in 1902, as a joint venture between the UKs Imperial Tobacco Company and the American Tobacco Company founded by James Buck Duke. Despite its name, derived from the home bases of its two founding companies, British American Tobacco was established to trade outside both the UK and the USA, and grew from its roots in dozens of countries across Africa, Asia, Latin America and continental Europe. We were born international, and have developed over a centurys expertise in operating locally in diverse cultures around the world. 2.1.1 British American Tobacco's Global Presence British American Tobacco Group is the worlds second largest quoted tobacco group by global market share, with brands sold in more than 180 markets. With over 300 brands in our portfolio, we make the cigarette chosen by one in eight of the worlds one billion adult smokers. BAT holds robust market positions in each of our regions and has leadership in more than 50 markets. In 2007, subsidiaries enabled governments worldwide to gather over 17 billion a year in taxes, including excise duty on our products, more than 7 times the Groups profit after Research Report 16 British American Tobacco was 'Born International'
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh tax.BAT has sustained a significant global presence for over 100 years. Their business was founded in 1902 and by 1912 had become one of the worlds top dozen companies by market capitalization. Subsidiary companies produce some 684 billion cigarettes through 47 cigarette factories in 40 countries. Four of these and two separate plants also make cigars, roll-your-own and pipe tobacco. BAT employ over 53,000 people worldwide. Their workforce is strongly multi-cultural and has a devolved structure, with each local company having wide freedom of action and responsibility for its operations. Decisions are made as close as possible to the local stakeholders of each business, within a framework of principles, standards, policies, strategies and delegated authorities. BAT believes that because our products pose risks to health, it is all the more important that dialogue with our stakeholders, they are working to pursue our commercial objectives in ways consistent with changing expectations of a modern tobacco business. BAT is the only international tobacco group with a significant interest in tobacco leaf growing, working with thousands of farmers internationally. Their companies run leaf programmes providing direct agronomy support to farmers if it is not otherwise available, covering all aspects of crop production and environmental best practice - in 2007 our companies ran these in 19 countries. Our companies purchased 460,000 tonnes of leaf in 2007, grown by some 280,000 farmers.
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2.1.2 Regional Operation of BAT
2.1.3 Regional Operation of Asia-Pacific
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh 2.1.4 British American Tobacco Group The British American Tobacco Group is one of the worlds leading international manufacturers of cigarettes, marketing its products in almost every country worldwide. It is clear leader in a competitive and fast moving business.
2.1.5 British American Tobacco Co. Ltd. British American Tobacco, the second largest Tobacco Company in the world is also the worlds most global tobacco company. Based in London, UK, it operates in more than 50 countries with 85,000 employees selling more than 300 brands in more than 180 markets worldwide. Tracing its heritage back to a joint venture formed by the Imperial Tobacco Company of the United Kingdom and The American Tobacco Company of the United States in 1902, today's British American Tobacco Company was born on the world stage. Extent of operation of British American Tobacco Company is given below: America-Pacific (USA, Japan, South Korea) Asia-Pacific (China, Indo-China, Taiwan, South-East Asia, Australasia) Europe (50 countries including Russia) Latin America (Central & South America, Mexico, Caribbean) Africa (More than 50 countries) MESCA (Middle East, South & Central Asia)
British American Tobacco, better known as BAT, is the mother-company of, at present, around 56 companies worldwide. British American Tobacco (BAT) is the worlds most international tobacco group. With a market share of 15 per cent, they make the cigarette chosen by one in seven of the worlds one billion adult smokers and make nearly two billion cigarette world wide everyday. BAT holds strong market positions in each of its regions and has a leadership in more than 50 markets of the 180 markets where they have
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh an active business presence. In total BAT employs nearly 90,000 people world wide and has over 80 factories in 64 countries. Gross revenue 18,143.9 million Net revenue 1,454.5 million Operating profit pre exceptional 2,575 million Pretax profit 1,522 million Adjusted EPS 57.87p Dividends per share 29.00p Group volumes 807 billion Global market share 16 per cent Assets 25,076.4 million Stockholders equity 6,918.9 million
Table 1: A Brief Overview of BATs Operation allover the world In order to support the company's business goals, the merger of British American Tobacco with Rothmans International had been announced on 11 January 1999. This global merger was completed on 7th June 1999. This brought together the number 2 and 4 players which together will boost a combined volume exceeding 900 billion cigarettes around the world with some 120,000 employees and a worldwide market share of 16 percent (Phillip Morris has a 17 percent share). The merger is a major step forward in British American Tobaccos vision of becoming the worlds leading International Tobacco Company.
2.2 British American Tobacco Bangladesh

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British American Tobacco Bangladesh is one of the oldest and largest blue chip multinational companies operating in Bangladesh. The British American Group holds 65.91% share in the company. The Government owns 26.57% through several of its agencies, while 7.52% is owned by other stakeholders. They are a leading business organization in the industrial sector employing more than 1,300 employees directly and a further 40,000 indirectly as farmers, distributors and suppliers. We have business contracts directly with around 32,500 registered farmers who produce high quality tobacco leaf.British American Tobacco Bangladesh (BATB) Company Limited is the recognized leader in Bangladesh cigarette market, with a long established reputation for providing its consumers with consistently high quality brands. The journey of this company started long back. BATB was established back in 1910 as Imperial Tobacco Company Ltd. with head office in Calcutta. In the very beginning Imperial Tobacco Company (ITC) launched a branch office at Moulivibazar Dhaka in 1926. Cigarettes were made in Carreras Ltd. Calcutta. Imperial and Carreras merged into a single company in 1943. After the partition in 1947, cigarettes were coming freely from Calcutta, but introduction of customs barriers in 1948 between India and Pakistan interrupted the smooth flow of cigarettes from Calcutta to East Pakistan. In March 01, 1949 Pakistan Tobacco Company (PTC) came into existence with the assets. And liabilities of ITC Limited held in Pakistan and a head office in Karachi. The then East Pakistan Office was situated in Alico Building, Motijheel. In order to meet the increasing demand, the first factory was established in Chittagong in 1952, in the then East Pakistan. From this time onwards requirements for cigarettes for East Pakistan markets were met from products manufactured in Karachi. In 1954 PTC established its first cigarette factory, although high-grade cigarettes still flowed in from West Pakistan. The Dhaka factory of PTC went into production in 1965. Later in 1966, BAT set up a new factory in Dhaka, called the Dhaka Factory (DF). After the Liberation War, Bangladesh Tobacco Company, more widely recognized as Research Report 21
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh BTC, was formed on 02 February 1972 under the Companies Act 1913. Shareholding position for GOB and BAT was 1:2. BTC (Pvt.) was converted into a public limited company on 03 September 1973. British American Tobacco played a pivotal role in BTC's creation in 1972 and since then has been involved in the development of BTC in every step. It is a policy of BAT that when a daughter company, as BTC was, achieves a certain standard of performance and exhibits at certain level of profitability, its nomenclature is upgraded to represent the original company, BAT. When BTC was successful in producing high quality cigarettes that achieved international standards in mid 1998, it came to be known as British American Tobacco Bangladesh, more commonly BATB.
March 1949 1954 1962 1965 February 1972 March 22, 1998
Formation of PTC PTC opened its first factory in Fouzdarhat, Chittagong Opened a branch in Moulavibazar, Dhaka Building of a factory in Mohakhali, Dhaka Incorporation of BTC with a paid up capital of Tk. 400 million Changed its identity from BTC to British American Tobacco Bangladesh Company Limited (BATB) Table 2: Brief History of BATB (Source: BATB)
2.3 Product Profile

2.3.1Premium
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Launched in 1997, Benson & Hedges (B&H) maintains our dominance in Premium segment and drives the growth of Premium price segment in Bangladesh market. Within a short time Bangladesh became a leading B&H market across the British American Tobacco world. Although the price of B&H was unilaterally increased in 2004, B&H remains a successful brand in our portfolio. BAT Bangladesh was the first market to launch the new pack of B&H at the beginning of September 2005. 1.3.2 High
Launched in 1980, John Player Gold Leaf is one of the highest selling brands of our Company - dominating the High price segment. In 2005, we launched three flavored Limited Edition Product and Packs under the Taste the World campaign, which were extremely well received by consumers. In July 2006, three Limited Edition Product and Pack (LEPP) were launched under the campaign Blenders Choice. BAT Bangladesh launched John Player Gold Leaf Smooth on December 2008. The new cigarette with its enhanced filtration and perforated long filter is geared to offer smokers a smoother smoking experience with a full bodied flavor.
Pall Mall is the first Global Drive Brand launched in Bangladesh on 19 March 2006. Pall Mall Lights was the first brand to unleash a mainstream Lights segment, while Pall Mall Menthol tapped into a latent Menthol segment. As the first brand to offer a range of product choices, stylish beveled edge packs and designer sticks, Pall Mall was able to create particular appeal to the ASU30. 2.3.2 Medium
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh Star, launched 40 years ago, is still a dominant brand in this segment. Currently it is the highest volume generating brand for the Company. At the same time, the cigarette stick carried a new look with brighter paper and bi-color dye.
2.3.3 Low
Although BAT Bangladesh has very strong brands in the other segments, we did not have any offer in this sub-value segment. In order to meet the demand of the smokers of this increasing Low segment, we launched this GDB+2 brand Viceroy Smooth Taste in August 2007. Subsequently, we launched Viceroy Rich Taste in March 2008. In August 2008 we have launched Viceroy Rich Taste 10s pack.
2.4 HR Profile
Chairman
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Managing Director Deputy Managing Director Finance Director Rep. of ICB Rep. of Ministry of Finance Rep of Ministry of Industry and Commerce
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Rep. of BAT
Source: BATB Figure1: Board of Directors
BATB is a public limited company. The Managing Director is the operational head and appointed by the British American Tobacco. Head of every department carries out their functions with the help of line managers. Different departments have different structure according to their function and responsibility. The Board of Directors and the Executive Committee (EXCO) govern the overall activities of the company. The "Board of Directors" is composed of 10 members who are called Directors. The Chairman heads the Board of Directors. The Chief Executive of British American Tobacco Bangladesh is called the "Managing Director", who is normally appointed by "BAT Holdings". The Managing Director of the company is the chairman of the Executive Committee. This committee includes the head of all the functional departments.
2.4.1 Corporate Culture

The Vision that motivates BATB employees and drives their operation is the desire to extend the market leadership through world class performance across all areas of BATB business. The company is a British company and it is guided by their principles. Their corporate culture and organizational behavior reflects the British culture and they embraced their home country culture in their Bangladeshi subsidiary as well. A key part of their work is helping nurture an open, confident and winning culture, where they are all Research Report 25
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh aligned in delivering consumer satisfaction. Its their job to ensure that people have the opportunity to release their energies in a constructive and focused way. They want their employees to have a clear vision for the business and to foster enthusiasm to drive superior performance. Furthermore, they expect their leaders to engage with their teams and to develop their people. Their culture also encourages ongoing development, so their role includes optimizing personal and organizational learning in order to leverage the capability of both the business and the individual to establish the company vision. They strive to match the needs of the organization and individual aspirations and encourage personal fulfillment. Therefore, success is recognized in ways which are relevant to the individual. 2.4.2 Four Guiding Principles of BATB 1. Strength from Diversity Actively utilizing diversity - of people, cultures, viewpoints, brands, markets and ideas to create opportunities and strengthen performance.
2. Open Minded Being an active listener, genuinely considering others' viewpoints and not pre-judging. 3. Freedom through Responsibility The freedom to take decisions and act on them obliges BATB to accept personal responsibility for the way they affect BATBs stakeholders. 4. Enterprising Spirit The confidence to seek out opportunities for success, to strive for innovation, and to accept the considered risk-taking that comes with it.
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2.5 Demonstrating CSR

Over the years British American Tobacco Bangladesh has made significant contributions to the socio-economic development of the country. BATB is one of the highest taxpayers in the country, contributing more than Tk 1,778 crore to the government exchequer annually in 2003. In 2004, the amount increased to 1,850 crore. Through various projects and initiatives, BATB is involved in improving the environment, supporting philanthropic organizations and promoting arts and culture and assisting with disaster relief. The following are a few demonstrations of BATB corporate social responsibility: A longstanding afforestation program, planting and distributing more than 39 million trees across the country since 1980. A one of a kind bio-filter installed in BATBs factory to reduce odor
emissions is now used as an example for emulation by other industries. Support for programs like Shandhani's posthumus eye donation, polio
vaccination and blood donations. Involvement in a vegetable seed multiplication program. Assistance to tobacco farmers in crop cycle planning and optimum
utilization of land. Run programs to promote farmers' literacy, health, hygiene, education,
family planning awareness and bank accounts. Provide prompt relief and generous support to affected communities in
cases of natural disaster. Commitment to the principles of sustainable development through high
international standards of environmental, health and safety practice. Research Report 27
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh Dishari a basic IT education centre was born in Chechua, Kushtia in
2002 to spread IT education among the youth of the country. In May 2003, the second centre of Dishari kicked off in Moulvibazar, Sylhet. So far more than 170 students have passed out from these two centres. We have taken this initiative to contribute to the promising IT education sector in the country, which is a thrust sector of the Government. For these extraordinary achievements British American Tobacco Bangladesh has been the proud recipient of a number of awards, including the National Export Trophy (2000), the Prime Minister's 1st Prize for Tree Plantation in 1999 and 2002; the Food & Agriculture Organization (FAO); award for pioneering the development of the vegetable seed industry. The company received the Prime Ministers 3rd prize in 1993 and 1st prize in 1999 and 2003 for its afforestation initiatives.
2.6 International Marketing Standards (IMS)

As a responsible market leader in a controversial industry British American Tobacco Bangladesh has proactively introduced a Code of Conduct regarding the marketing of tobacco products. BATB has always conducted its business responsibly and is committed to demonstrating sensible self-regulation for BATBs products, which carry health risks and should be consumed by adults only. The Code of Conduct is a set of provisions and principles, which clarifies BATBs position and guides all aspects of BATBs marketing activities. BATB wants to establish itself as a standard for responsible and reasonable tobacco marketing activities in Bangladesh. Key features of BATBs Code of Conduct are as follows: The following definitions are provided to assist in the interpretation of these Standards. Adult A person who is at least 18 years old, except where legal requirements or voluntary undertakings entered into by the Participants specify a higher minimum age for the lawful sale, Research Report 28
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh purchase, possession or consumption of tobacco products, in which case the term "adult" means a person of at least that minimum age. Any communication by or on behalf of a Participant to consumers, Advertisement which has the aim of encouraging them to select one brand of tobacco products over another. An event or activity organized by or on behalf of a Participant with Promotional event the aim of promoting a brand of tobacco product, which event or activity would not occur but for the support given to it by or on behalf of the Participant. Any public or private contribution to a third party in relation to an Sponsorship event, team or activity made with the aim of promoting a brand of tobacco product, which event, team or activity would still exist or occur without such contribution. Tobacco Products Youth Manufactured cigarettes, cigars, cigarillos, pipe tobacco, fine cut tobacco, and pre-formed tobacco rolls. Any person who is not an adult. The term also includes the plural.
Table 3: Guideline for Interpretation of Standards Source: BATB
2.7 Distribution Network

The infrastructure of the company has a broader field where the company plays its important role. BATB has 6 Regional Trade Marketing Offices (RTMOs), 12 Regional Sales Depots, 1 Factory, 1 Green Leaf Threshing Plant, 7 Leaf Depots and a Head office consisting of Corporate Head office and Production Head office. The Companys Head office and Cigarette factory are located in Dhaka. A Green Leaf Threshing (GLT) Plant has been set up in Kushtia and it has started operation from April 1995. The companys products are manufactured in the factory at Mohakhali, Dhaka. The Plant Manager who reports to the Production Director at the Head Office heads Dhaka factory. The company procures tobacco leaf maintaining the international standard and it imports processed Research Report 29
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh tobacco leaf for its international brands. It procures green tobacco from the registered farmers of the leaf area mainly for its local brands. The companys authorized leaf areas are located in Kushtia, Chittagong and Manikganj. But bulk of tobacco leafs comes from Kushtia region. The Chittagong area is under development process and it now covers Rangunia and Lama. The company operates 7 leaf depots in the leaf area. Four of them are located in Kushtia region, 2 of them are located in Chittagong and other 1 is in Manikganj, The Company provides all sorts of supports to the registered growers through its depot personnel. This includes technical know how, agricultural inputs and financial assistance. The company performs its sales and distribution operation all over the country through its five regional sales offices. They are located in Dhaka, Khulna, Chittagong, Sylhet and Rajshahi. Each of the regions is again divided into operational areas, each of which in turn is divided into territories. To perform its sales and distribution smoothly, the company operates 10 sales depots in different locations of the country and it has 63 authorized distributors.
2.8 Growth & Development Profile

2 .8 .1 Growth in Sales Volume
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh With a very efficient and aggressive sales force and a good backup from every other department, BATB has achieved almost a linear rate of increase in sales through 1999 to 2002. From 2003 to 2004 the rate of growth has declined (Chart 1.1).
2003
2004
20
2005
2006
2007
2008
Chart 1: Trends in Sales of BATB (2003 2008

Source: BATB
2.8.2 Number of Products
19 18
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After liberation, BATB, then BTC, started its journey with a few prominent brands of the contemporary time. Among the brands: Pilot, Capstan, Gold Flake, Embassy and King Stock were the most prominent. Along with that BTC also produced pipe tobacco with the brand Gold Flake. Around the times, BATB has added and subtracted many brands for the demanding situations. In 1999 and 2000, BATB had B&H Research Report
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh (imported), SE 555, JPGL (John Player Gold Leaf), JPGL Lights, Star (filter and plain), and Scissors (filter and plain) under it portfolio of marketed brands. In 2001, BATB added the name of B&H Lights, Star Classic and London into its armory. Along with that they also started to produce the brand B&H locally. In 2002, BATB discontinued Star Classic and Scissors Plain as they failed to gain the market as expected. BATB also launched a massive campaign to rejuvenate JPGL Lights to deeply penetrate through the market. In 2003, BATB temporarily discontinued the production of JPGL Lights to look for better blends. The company has also launched a new Campaign to re-energize Star Filters with the new packaging from 14th June, 2003. This new packaging and the new campaign are expected to put a significant impact on the ongoing battle for market share between Star of BATB and Navy of Dhaka Tobacco. In the beginning of 2005, it has launched Dunhill Cigar in a selected outlet, the Pan Pacific Sonargaon Hotel.
2.9 Departments
BATB has been operating its business under the following major functional areas:
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Source: BATB Intranet
Historical background of the dimensions
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Afforestation is the process of converting open land into a forest by planting trees or
their seeds. The term may also be applied to the legal conversion of land into the status of royal forest (Sternak A., 1983) Since the industrial revolution many countries have experienced centuries of deforestation, and governments and Non-governmental organisations (NGO's) directly engage in programs of reafforestation (the restocking of existing forests and woodlands which have been depleted, with native tree stock) and also in supporting private and semi-private enterprise in programs of afforestation (the planting of renewable tree stocks for harvesting as lumber or firewood).Aside from commercial purposes, afforestation is also undertaken by government and other authorities to create recreational woodland. Gil W., Gorzelak A. 1999 The conversion of bare or cultivated land into forest is essential. As industrial and economic activities expand, global environmental problems grow ever more serious. Environmental issues will be as urgent a task for mankind in the 21st century as with overcoming population, food, resources and energy issues. Afforestation will help establish a forest on land that is not a forest, or has not been a forest for a long time by planting trees or their seeds. The afforestation activities of the industrial region not only serve as foreground and background landscape features but also contribute to the overall improvement in the environment ( Bulfin, M. 1987).
Free Primary Health Care Primary health care is essential health care based on
practical, scientifically sound and socially acceptable methods and technology made universally accessible to individuals and families in the community through their full participation and at a cost that the community and country can afford to maintain at every stage of their development in the spirit of self-reliance and self-determination. (Starfield 1992, 1998; Pincus et al 1998; Malcolm 1999).). It forms an integral part both of the country's health system, of which it is the central function and main focus, and of the overall social and economic development of the community. It is the first level of contact of individuals, the family and community with the national health system bringing health care as close as possible to where people live and work, and constitutes the first element of a continuing health care process (Shi L. 1997)."Primary health care services focus on Research Report 34
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh better health for a population, and actively work to reduce health inequalities between different groups. The ultimate goal of primary health care is better health for all. WHO has identified five key elements to achieving that goal: reducing reducing exclusion and social disparities in health (universal coverage reforms); organizing health services around people's needs and expectations (service delivery reforms) integrating health into all sectors (public policy reforms); pursuing collaborative models of policy dialogue (leadership reforms), (Baum F, Kahssay H. 1999). Reducing the barriers, particularly financial barriers, for the groups with the greatest health need, both in terms of additional services to improve health, and to improve access to first-contact services is essential. (Barnett J, Coyle P. 1998)
Community Support is an act that benefits the local community. People become
involved in community service for many reasons: for some, serving community is an altruistic act, addresses the well-being of women, men, seniors, children, youths and minority and disadvantaged people. It is now widely accepted that meaningful community involvement is absolutely central to the development of healthy, strong and sustainable communities. Organizations which serve such communities are doomed to fail unless they are willing to involve citizens in decision making processes. These enable to directly allow citizens to share their experiences with each other. All however have the primary aims of realizing the right of citizens to participate in decision making processes that directly affect their lives. Today, corporate philanthropy has evolved into a new form with the business-like description of corporate community involvement. Firms view community needs as opportunities to develop ideas and demonstrate business technologies, to find and serve new markets, and to solve long-standing business problems (R. Kanter, 1999 and C. Wild, 1993).
Training and development is the field concerned with organizational activity aimed
at bettering the performance of individuals and groups in organizational settings. It has been known by several names, including employee development, human resource Research Report
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh development, and learning and development. In the field of human resource management, training and development is the field concerned with organizational activity aimed at bettering the performance of individuals and groups in organizational settings. It has been known by several names, including employee development, human resource development, and learning and development. The principal objective of training and development division is to make sure the availability of a skilled and willing workforce to an organization. Through training and development there can be an increased employee motivation, an increased job satisfaction and morale among employees. It can increase innovation in strategies and product and reduce employee turnover (Rosemary Harrison, 2005 and Patrick J. Montana, 2000 et al).
Compensation is a systematic approach to providing monetary value to employees in

exchange for work performed. Compensation may achieve several purposes assisting in recruitment, job performance, and job satisfaction. Compensation is a tool used by management for a variety of purposes to further the existence of the company. Compensation may be adjusted according the business needs, goals, and available resources. The best practices in the management of human resources are the ones which optimize a workforce so that it can not only get more done, but also ensure a greater level of efficiency, timeliness and quality as it accomplishes increases productivity overall (Joseph J. Martocchio 2001). The important areas in which the best human resources practices must be applied include the creation of viable and attractive benefits and compensation packages, managing the performance of employees, making sure that business practices and worker conditions stay well within the law, creating a positive, enjoyable work environment, talent recruitment and mapping out the best human resources strategy for the future. Compensation can increase or maintain morale/satisfaction and thus retain qualified employees. It can reward and encourage peak performance and achieve internal and external equity. Well designed compensation package can be used to reduce turnover and encourage company loyalty (Susan Peterson 1999).
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Workers Participation The thought that the participation of workers in management is

inevitable in the process of decision making for higher productivity in micro and macro level and for the smooth functioning of industrial democracy has gained much strength today. It is because of the realization that labor is not only the factor of production; it is also a sensitive human element. Worker participation implies arrangements designed to involve workers in the enterprises decision making process. This allows for workers involvement in the initiation, formulation and implementation of decisions within the enterprise. The concept can also be understood in terms of a new approach to industry and society in which people want to be interested with the taking of decisions which have direct bearing on them. (Mankidy, 1984: Yesufu, 1984, et al) MacGregor (1960) contend that worker participation consists basically in creating opportunity under suitable conditions for people to influence decisions which affect them. It is a special case of delegation in which the subordinate gain greater control, greater freedom of choice with respect to bridging the communication gap between the management and the workers. This serves to create a sense of belonging among the workers as well as a conductive environment in which both the workers would voluntarily contribute to healthy industrial relations. The concept of workers' participation in management and decision-making processes is not a new concept. Provisions like works committee, joint management council, and nomination of workers' representatives in managing committee have been included in labor laws of various countries. The demand for participation in management is to be raised in order to bring about transparency in managerial activities and decision-making process, which will enhance a fair sharing of gains. It will strengthen workers' psychology as labor investors of equal status and will produce positive results in terms of higher and higher productivity (Kester, G. 1999).
Industrial relations Industrial relations are defined by way of the exchange relations
between wage labor and capital, the structural inequality that this implies, and the power relations in the workplace enforced through labor capital exchange. The field of industrial Research Report 37
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh relations looks at the relationship between management and workers, particularly groups of workers represented by a union. (Olson, 1971; Offe and Wiesenthal, 1985). Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated. The term industrial relations have a broad as well as a narrow outlook. Originally, industrial relations were broadly defined to include the relationships and interactions between employers and employees. From this perspective, industrial relations cover all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations. Accordingly, industrial relations pertains to the study and practice of collective bargaining, trade unionism, and labor-management relations, while human resource management is a separate, largely distinct field that deals with nonunion employment relationships and the personnel practices and policies of employers (Kaufman, 2003).
Sustainable competitive advantage Sustainable competitive advantage is the unique

position that an organization develops in relation to competitors that allows it to outperform them consistently (Hofer and Schendel, 1978). As this definition suggests, advantage can only be achieved by establishing a clear and favorable differentiation from competitors. This difference must be tangible and measurable, and it must be preservable over time (South, 1981). SCA allows the maintenance and improvement of the enterprise's competitive position in the market. It is an advantage that enables business to survive against its competition over a long period of time. Many forms of competitive advantage cannot be sustained indefinitely because the promise of economic rents invites competitors to duplicate the competitive advantage held by any one firm. A firm possesses a sustainable competitive advantage when its value-creating processes and position have not been able to be duplicated or imitated by other firms. Sustainable competitive advantage results, according to the Resource-based View theory, in the creation of above-normal (or supranormal) rents in the long run. (Porter, M.E, 1985: Barney, J.B, 1991) Research Report 38
Importance of the dimensions

Afforestation
As industrial and economic activities expand, global environmental problems grow ever more serious. Organizations have come forward to minimize the impact on the environment as forests provide industrial timber and fuel, they are also increasingly critical in the preservation of national lands, the conservation of water resources, and human health, culture and education. Bangladesh is one of the most vulnerable countries to the impact of climate change. Conservation of wood and natural forest is very essential for the sustainability of the country. In Bangladesh wood is a primary source of fuel and this method is adopted throughout the country. Wood fuel is not only required for tobacco curing but also for other functions which is causing natural forest to deplete at a high rate. This initiative will favorably affect BAT to gain sustainable competitive advantage. This will create goodwill for the overall organization and as afforestation directly effects the environment this will give the company an image of eco friendliness and will help the company to sustain in the longer run. Primary Health Care A strong primary health care system is central to improving the health of Primary health care services will focus on better health for a population; access to free primary health care improves the living standard and has an effect on sustainable development. Bangladesh is in great need of primary health care support. There are a huge number of disadvantaged people who suffer due to the lack of primary health care services. The health care services provided by the government are not sufficient and also it is hard for them to avail the services due to many barriers. For an organization to identify such a need of the country is commendable. Organization over the world is coming forward to help their nation and its people through such initiative. Bangladeshi organization being able to include such initiative in their CSR program can easily sustain in the long run. Research Report 39
Community Services Meaningful community involvement is absolutely central to the development of healthy, strong and sustainable communities. In Bangladesh there are many problems of the rural masses are interrelated, such as illiteracy, poverty, disease, and civic inertia. Organizations are coming forward to find solutions and this will require development or strengthening of community-level organizations, which in turn will require active participation of the community in planning, implementing, and evaluating projects. Private organizations and multinationals are coming forward in developing techniques and methods for development in collaboration with the community. This bring sustainability to the community as a whole and also enables the organization to function and sustain in the communities in which they operate.Thus this dimension is important as it might bring sustainability to the organization as well.
Training and Development
This dimension is important as it analyses the importance of the training sector, which is also related to a countries overall literacy rate. Companies wanting to build a sustained competitive advantage should invest in their people. They are the competitive advantage that cant be copied. Training can ensure you are on top of best practices, regulatory changes, the latest research and development, and new trends in environmental and social responsibility. Training can also help you to engage and retain your employees. This is particularly important in light of the skilled labor shortage. The benefits of a highly trained workforce are obvious to both the employer and the employee. For the employer, it is far more cost-effective to train existing employees to learn new skills than it is to hire new employees. For employees, job training helps them to acquire new skills, maintain job security and increase their earning potential. Thus this advantage will help them run smoothly in the long run. Compensation Strategy
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh This strategy is given importance in this study as compensation is one of the most important ways to motivate todays workforce, and is thus an issue that needs to be taken into consideration. For a business to achieve the results associated with a competitive advantage it needs the right people consistently doing the right things in the right way and for the right reasons. As a result, any rewards system that is built must, at its core, encourage a focus on the right performance factors and reward their execution. In Bangladesh the compensation packages do not function well. Organizations are following the prehistoric compensation systems which were designed in a manner of one size fits all. A well designed compensation strategy unique and motivating will have a positive impact on the organizational sustainability Workers Participation This strategy is given importance in this study as it can improve workers efficiency and productivity; and overall morally and ethically it satisfies human needs for creativity, achievement, social approval, social justice, and freedom. Workers participation in management means giving scope for workers to influence the managerial decision making process at different levels by various forms in the organization. In Bangladesh this sort of strategies will surely have a positive impact. Bangladeshi organizations follow a closed door technique and thus employees lose the trust from the company. The demand for participation in management is to be raised in order to bring about transparency in managerial activities and decision-making process, and thus give an organization a unique competitive advantage.
Industrial Relations This is of particular importance as the overall industry; with the unionized employees is a major dimension of the whole industry. Good industrial relations can enhance a firms efficiency and gain a competitive advantage over others. As industrial relations Research Report 41
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh cover all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations it can be a source of sustainable competitive advantage. Organizations having sound industrial relations will be more efficient compared to other not having it. Age of Employees This dimension is particularly important for this study as it can be seen that a younger and more educated workforce can be of better competitive advantage than a more senior workforce can. Size of the Companies with Sustainable Competitive Advantage The size of the company depicts a part of the overall industry and is of particular importance regarding the topic of efficiency. Size of the company can have an influence on the companys productivity and efficiency. Academic Qualifications with Sustainable Competitive Advantage Academic Qualifications are definitely a very important dimension, as the more qualified a person is, the better he would contribute to the field that he or she is working in. Qualified people are still less in number in Bangladesh and the more the qualified the more can be his or her efficiency. Marital Status with Sustainable Competitive Advantage In the context of Bangladesh, marital status is an important factor that would have a significant relationship with the output of an employee. Marital status is important aspect as it can has a direct impact on peoples life and eventually on the company. Gender with Sustainable Competitive Advantage Gender in Bangladesh is an important factor as the perspective and productivity might vary with it. Gender of an individual can be important for sustainability at least in Bangladeshi context. Research Report 42
Instrument Development
For carrying out this research I have prepared a set of questionnaire which worked as an important instrument to undertake the research properly. Survey questionnaires are typically used for feedback research to determine the current status or "situation," or to estimate the distribution of characteristics in a population. Writing a survey questionnaire is one of the most critical stages in the survey development process. It is common sense to require that the concepts be clearly defined and questions unambiguously phrased; otherwise, the resulting data are apt to be seriously misleading. Questionnaire development is the most crucial part of survey design process. Starting from a theoretical question of how we bring abstracts into feasible questions to more practical inquiries in implementation as what are the ways to maximize response rate and rewards for respondents, and how I can minimize survey costs while achieving the goal, questionnaire development requires a high level of sophistication of well-rounded knowledge of overall survey process. A Likert scale type questionnaire is constructed for data collection. This is the most widely used scale in survey research. When responding to a Likert questionnaire item, respondents specify their level of agreement/disagreement to a statement. A Likert item is simply a statement which the respondent is asked to evaluate according to any kind of subjective or objective criteria; generally the level of agreement or disagreement is measured and often five ordered response levels are used. The format of my five-level Likert item questionnaire is: 1. Strongly disagree 2. Disagree 3. Neither agree nor disagree 4. Agree 5. Strongly Agree Research Report 43
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh In order to design the questions I came up with 7 Independent variables and 1 Dependent variable. I had to design my questionnaire by using these variables in mind. The research is based on these issues and these are the areas I wanted the inputs from. The seven Independent variables include: 1. Afforestation Strategy of CSR 2. Free primary Health Care Strategy of CSR 3. Community Support Strategy of CSR 4. Training and Development Strategy of Hrm 5. Compensation Strategy of Hrm 6. Workers Participation 7. Industrial Relation Strategy of Hrm
Dependent variable includes: 8. Sustainable Competitive Advantage I had to design the questions in such a manner such that a significant relationship can be determined between the dependent and independent variables. Each of these variables is very important and I had to study a lot to come up with the related questions from each area. I also went through articles, journal and text book which each of these areas were explained in detail. I picked out topics from these reading materials and prepared the question relating to the subjects. As I was designing the questionnaires for Bangladeshi respondents I had to keep the language of the questions very simple yet related to the theories of course. I made sure that the questions were based on the Bangladeshi perspective and also reflecting the Bangladeshi HRM and CSR systems and policies. As I decided to conduct the research on British American Tobacco I highlighted the issues related to the company. Research Report 44
Collection of Appropriate Data

I collected data through surveying individuals using the designed questionnaire. I relied mostly on the primary data collection system. I tried to reach a large number of respondents about 120 respondents from my selected company. I collected my data from employees of BAT Bangladesh. I surveyed respondents mainly from the HR Department and the Cora Department of the organizations. I have tried o generate standardized, quantifiable, empirical data - as well as some qualitative data. I knew that the data collection methods had pros and cons, yet I tried my level best to outweigh the cons. I have tried my level best to designing the survey instruments capable of generating credible and reliable data. Collection of data was a tiresome job some of the employees of the organizations were not that cooperative, also I faced with the problem of incomplete questionnaires.
Statement of the problem
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Maintaining sustainable competitive advantage at British American Tobacco Bangladesh

BAT Bangladesh aims to gain competitive advantage by enhancing the consumer tobacco experience in everything they do and to build a sustainable business, one of profitable growth which will be strengthened by each generation. The challenges faced by tobacco companies today are immense. Criticism and allegation against tobacco companies are making them week. The company has faced a number of significant challenges in the past several years, including:
Market competition first from regional, and then illegal local alternatives and illegal (duty-not-paid) imported supplies; Continued tax increases in the face of declining market demand; The effects of the international controversy over the harmful effects of smoking;
Their corporate culture and organizational behavior reflects the British culture and they embraced their home country culture in their Bangladeshi subsidiary as well. We can a see a mixture of both the culture in BAT Bangladeshs strategies. A key part of their work is helping nurture an open, confident and winning culture, where they are all aligned in delivering consumer satisfaction. The Vision that motivates BATB employees and drives their operation is the desire to extend the market leadership through world class performance across all areas of BATB business. The company is a British company and it is guided by their principles. The company clearly identified that a strategic approach to human resource management, development and administration was the primary requirement for dealing with the critical issues that it faced, and has been following such an approach since 1996. Under this approach, it has set out to achieve the following objectives:
Create an environment within which all parties could engage each other, build trust and produce satisfactory results.
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Ensure a stable working environment in which the unions and the workers would become partners in achieving the companys overall objectives. Develop leadership among workers and create an innovative environment; Ensure the virtual absence of disruptive industrial relations issues; Upgrade the base level of education and skill of all employees; Achieve significant increases in productivity even while there has been a reduction in employment levels; Create the cultural change from a manufacturing orientation to a service orientation; Develop and maintain a reputation as an employer of choice.
BAT also focuses on CSR to minimize the impact in the community they operate. All large listed companies today, particularly those engaged in controversial industries, need to develop effective CSR programmes in order to deal with the pressures brought to bear by, and the expectations of, governments, NGOs, consumers and other stakeholders. BAT appears to have realized this ahead of many peer consumer companies. The company's motives are open to being interpreted as cynical as another lobbying effort intended to disguise the impact of its business conduct and protect itself against unwanted regulation. But, from a financial analyst's perspective, BAT's CSR programme has an important role to play in the debate about the long-term future of the company. Unless companies like BAT can convince stakeholders that they have a right to exist, they face the risk of being shut down, nationalized, or litigated into bankruptcy with obvious significant implications for the values shareholders are likely to place on those companies. Scrutiny by governments, media, NGOs and health campaigners is today so intense that if BAT treats its CSR programme as a mere smokescreen' as opposed to an integrated part of the company's strategy and conduct - it faces severe reputation risk and a potential regulatory backlash, which could have a bad negative impact on the market's valuation of the company. (BAT About Us 2007) Gaining a competitive advantage today is a race against time. Competitive advantage, however, no longer depends on the technologies used for drug discovery, such as Research Report 47
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh chromatographs or gene libraries. Any company with enough capital and the right training can deploy these technologies. A sustainable competitive advantage is derived from a firm's resources or capabilities that are unique to the firm cannot be easily duplicated by competitors, and offer customers special value (Barney 1991; Hitt, Ireland, and Hoskisson 1995). CSR has emerged as an inescapable priority for business leaders in every country. Many companies have already done much to improve the social and environmental consequences of their activities. Some companies use CSR methodologies as a strategic tactic to gain public support for their presence in global markets, helping them sustain a competitive advantage by using their social contributions to provide a subconscious level of advertising. (Pohle, G. and J. Hittner , 2008). The link between competitiveness and CSR at firm level has long been an important topic for both CSR researchers and practitioners, often under the banner of the business case for CSR. CSR can contribute to a number of social, environmental and economic policy objectives. The aim of this report is to provide an up-to-date overview of how CSR can contribute to competitiveness. (Porter, M. and M. Kramer (2006) Careful and painstaking nurturing of the human resources also adds value to the organization in the long run. An effective Human Resource HR management framework is instrumental in sustaining competitive advantage in the market. Strategic human resource management has been linked to competitive advantage and in turn to organizational performance. This linkage has been viewed from a universal, a contextual or a configurationally perspective. Sustainable competitive advantages are fundamental to a firm's long-run success. Strategic HRM practices can enhance the competitive advantage of businesses results of the practices are reflected in real financial gains for the business (Lengnick-Hall, C.A. and Lengnick-Hall, M.L, 1988). Michael Porter (1985), in his popular value chain approach to competitive advantage, describes human resource management as a support activity, that along with technology development and procurement, serves to sustain higher priority primary activities. Research Report 48
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh Sustainable competitive advantage is the unique position that an organization develops in relation to competitors that allows it to outperform them consistently. As this definition suggests, advantage can only be achieved by establishing a clear and favorable differentiation from competitors. This difference must be tangible and measurable, and it must be preservable over time (Hofer and Schendel, 1978). According to Coyne (1986), competitive advantage is meaningful only if it is felt in the marketplace; that is, the differentiation must be perceived as an important buying criterion to a substantial customer base. Such an advantage will be sustainable, only if it cannot be imitated (Barney, 1991). In essence, a gap in the capability underlying the differentiation must distinguish the producer from its competitors; otherwise, competitors can erase the differentiation at will (Coyne, 1086). In order to create such a gap, the organization must deploy its unique combination of skills and resources to exploit environmental opportunities and neutralize threats. According to Barney (1991), three categories of firm-specific resources are available for sustainable competitive advantage: (1) Physical resources are those tangible elements used in a firm's production process, ranging from its plant and equipment to its access to raw materials; (2) Organizational resources include the firm's structure and processes, from strategic planning systems to reward and control processes; and (3) Human resources include the training, experience, judgment, relationships, and insight of individual managers and workers in a firm (Barney, p. 101).
Objective of the study
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh The objective of the study is to determine the ways that BAT Bangladesh demonstrated commitment to their corporate social responsibility and Strategic Human Resource Management, their outcomes or success achieved as a result, and how they are gaining Sustainable Competitive Advantage through these. Also this paper will determine the significance and importance of strategic human resource management and CSR practices in gaining sustainable competitive advantage in the long run.
Conceptual Model
Afforestation Free Primary Health Care Community Support Training & Development Compensatio n Workers Participation Industrial Relations Fig 1 : Effects of CSR and HRM Strategies and its outcomes in gaining Sustainable Competitive Advantage. Outcomes: Motivation, Retention, Commitment , Engagement, Corporate Citizenship
Sustainable Competitiv e Advantage
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh In this model it has been assumed that CSR and HRM practices and policies have a effect on sustainable competitive advantage. The CSR strategies include a) Afforestation, b) Free primary health care support, c) Community services and the HRM strategies include a) Training and development, b) Compensation, c) Workers Participation, d) Industrial Relations. These dimensions on the left are presumed to have an impact on Motivation, Retention, Commitment, Engagement, and Corporate Citizenship. It is proposed that the CSR and HRM outcomes Motivation, Retention, Commitment, Engagement, and Corporate Citizenship will be influenced by the CSR and HRM practices and policies of a firm. Additionally there may be a direct effect of HRM and CSR practices and policies on sustainable competitive advantage. In total there are seven dimensions on the left and their outcomes in the middle and the ultimate outcome of the chain is Sustainable Competitive Advantage. The following sections will develop hypothesis concerning the relationship between CSR and HRM practices and its outcomes as well as sustainable competitive advantage. The next part will discuss on how corporate social responsibility (CSR) and sustainable development is gaining increasing prominence in the global business culture, as many businesses attempt to accommodate the CSR agenda. It also appears that many CSR initiatives reflect the essence of human resource management activities. Also there is a growing overlap between human resource management and CSR and it is becoming increasingly important for HR professionals to take a leading role in both planning and implementing CSR strategies and in turn using CSR to deliver their own HRM objectives. To sum up, I propose that the HRM and CSR policies and practices and their outcomes retention, employee morale, motivation, commitment, employee engagement has a positive impact on sustainable competitive advantage. \
Literature Review
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The Dependent Variable: Sustainable Competitive Advantage The Independent Variable: 1. Afforestation Strategy of CSR 2. Free primary Health Care Strategy of CSR 3. Community Support Strategy of CSR 4. Training and Development Strategy of Hrm 5. Compensation Strategy of Hrm 6. Workers Participation 7. Industrial Relation Strategy of Hrm Afforestation Strategy of CSR: Bangladesh is one of the most vulnerable countries to the impact of climate change. Afforestation contributes to the maintenance or improves the provision of ecosystem goods and services at the landscape level. This strategy is promoted to benefit climate change mitigation, biomass production, biodiversity conservation, soil and water protection, and erosion and desertification control. This also help mitigate against natural hazards, (wind, storms, landslides, etc.) and the impacts of these hazards on human settlements and infrastructure (Global Environment Facility, 2008). Afforestation programmes support and enhance the economic and social well-being of indigenous and local communities, including landowners, operators, contractors and workers should be promoted. Appropriate mechanisms, including legislation, should be provided for so that afforestation can follow sustainable management practices and take into account income generation, rural livelihoods and poverty alleviation (Gil W., Zachara T., Michalak R., 1999)
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh Organization like BAT believes in sustainable development and is the pioneer in establishing afforestation program in Bangladesh. British American Tobacco Bangladesh began its afforestation program in 1980 to compensate for wood burning in tobacco curing. The pressure on land for farming meant that farmers were at first reluctant to allocate land to trees, especially as they might not be able to harvest them for some years. The companys solution was to plant fast-growing trees on canal banks, roadsides and railway embankments. Most saplings planted are still Ipil Ipil, along with Neem and fruit-bearing species. Neem is valued as timber and wood fuel, and its leaves can be harvested and made into a biologically-friendly pest control agent. The company is encouraging its use to help reduce farmers' need for chemical pesticides BAT is the pioneer in such initittive wheres now Standard Chartered and GP came to such initiative of making a greener Bangladesh. (BAT Afforestation Factsheet, 2008) H1: Afforesatation programs will be able to gain sustainable competitive advantage for BAT Bangladesh.
Free Primary Health Care Strategy of CSR: It has become a necessity to provide accessible, affordable, and sustainable primary health care for all but it has been implemented only partially in developing countries. A strong funding mechanism is required for strengthening primary health care in developing countries. People all over the world people is becoming more and more frustrated at the inability of today's health systems and services to meet their needs, demand for a renewal of primary health care - and health for all - is increasing. Ensuring sufficient supply of medicines and services; removing financial barriers to access and ensuring social health protection is vital for the developing nations. Traditional healthcare delivery models needs to be transformed (specialist, procedure or hospital-based) into people-centered primary care networks (WHO, 2006). For sustainable development it is necessary to ensure that all relevant sectors (e.g. labor, environment, education) factor health into their agendas. Maternal mortality is also a Research Report 53
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh major challenge for which concrete and efficient responses must be found. Around 500,000 women die each year from complications linked to pregnancy, labor or post partum. Unfortunately one cannot but notice that the obligation to pay to access health care has had and still has important negative consequences on the health situation and the standard of living of populations, especially in countries with a low income (C. James S. Morris, R. Keith et al. 2005) People of Bangladesh are known as hardworking, with proven capability to preserve mental strength in the event of unexpected extensive loss due to natural calamities, such as floods, cyclones, epidemics, etc. But, their basic needs have remained unfulfilled. Health is a basic requirement to improve the quality of life. National economic and social development depends on the status of a countrys health facilities. A health care system reflects the socio-economic and technological development of a country and is also a measure of the responsibilities a community or government assumes for its peoples health care. The effectiveness of a health system depends on the availability and accessibility of services in a form which the people are able to understand, accept and utilize. With the development of modern science and technology, health services emphasize primitive and preventive rather than curative health care. Yet, a large number of people of Bangladesh, particularly in rural areas, remain with no or little access to health care facilities. It would be critical for making progress in Bangladeshs health services to improve the peoples participation in the health sector. The Government therefore seeks to create conditions whereby the people of Bangladesh have the opportunity to reach and maintain the highest attainable level of health. Bangladesh has a good infrastructure for delivering primary health care, but the full potential of this infrastructure has due to lack of adequate logistics never been utilized. (M. Shafiqul and M.Woli, 2009) Health is one of the key focus areas where Grameenphone has consolidated its social investments. They have undertaken a number of healthcare projects. Through USAID's network of 318 Smiling Sun Clinics in 61 districts, we launched the "Grameenphone Safe Motherhood and Infant Care Project," giving free and comprehensive safe motherhood Research Report 54
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh and infant care services essentially to all economically disadvantaged mothers and their infants nationwide. Like GP Dutch Bangla Bank has also included various health care support to the disadvantaged and invested heavily in this. They have also been conducting free eye-care camps in rural areas where people have little or no access to quality healthcare; carried out mass-media campaigns on National Immunization Days and to raise awareness and advocate for necessary policy reforms on HIV/AIDS in Bangladesh. (GP and Dutch Bangla Bank website) Like most of the developing countries, Bangladeshs economy is still predominantly agriculture based and for any sort of sustainable development to take place, the farmer base will be critically important. Primary Health Support is the major initiative undertaken by BAT to complement the development effort made by the Government. To provide free primary health support to the farmers families (farmer, his wife, his children and his dependent parents) in the rural communities the services have been commissioned by the selected reputed NGO health network called Smiling Sun. This support includes free prescription and consultation from an MBBS Doctor, free consultation on maternal health, free consultation on child health, free consultation on family planning, free vaccination and medicines at subsidized price round-the-year for the farmers families. (BAT Primary Health Support Fact Sheet, 2008) H2: Primary Health Care Services will be able to gain sustainable competitive advantage at BAT Bangladesh.
Community Support Strategy of CSR: Corporate community involvement is essential in maintaining good relationships with a variety of stakeholders, from employees, to customers, to shareholders and local Research Report 55
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh communities. Dealing with larger social welfare issues, or support for arts and culture, were historically the responsibility of governments but now the organizations have come forward to share the responsibility. Community involvement particular appears to have increased in recent years but studies detect more change in the promotion of policy on community involvement than in practice. Community involvement increases co-operation, communication and contact between participants and others, which fosters trust and further communication in future; It gives a greater sense of identification with the local area and a greater mutual tolerance of the constraints faced by the others involved; and thus a sense of partnership arises. Organizations are using their strengths in connecting and communicating and to help make a difference. They are getting involved with youth and education issues around the world, preparing young people for their future. McGregor et al. (1992) Grameen Phone and Dutch Bangla Bank and standard chartered Bank acknowledge that development and poverty reduction depend on holistic economic prosperity. Therefore, their aim is to increase development opportunities, enhance development outcomes and contribute towards improvement of the quality of life of the people through their CSR initiatives and innovative services. They are committed to facilitate empowerment opportunities to the vulnerable people of Bangladesh, so that it enables them to better influence the course of their lives and live a life of their own choice. (GP and DBBL, SCB website) BATB has undertaken a varied Community Services program with a number of interventions to promote sustainable development within the rural village community. Continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce, their families and the local community and society at large. More than goodwill, corporate community involvement or strategic corporate philanthropy, corporate responsibility is a genuine attempt by a company to build meaningful relationships between the corporate sector and Research Report 56
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh the rest of the society. corporate community involvement activities should be based on respect for the individual, continuous learning, achievement and customer satisfaction (BAT Community Support Factsheet, 2008) H3: Community Support will be able to gain sustainable competitive advantage at BAT Bangladesh. Training and Development strategy of HRM Skill development may not enhance the competitive advantage of a firm directly as because it is visualized as a short-run development process. But the significance of skill development can be realized if the process is based not only on filling gaps in current skill levels but also assuring the necessary skill levels to motivate employees towards more organizational learning and teamwork. However, it should be also seen as a long term iterative process which can contribute towards the core competencies of a firm and can help building in rare and valuable resources by which organizations can gain competitive advantage (Fuente de la, 2003). Training and Development (T & D) can be the most important HRM function to treat people well and increase the competitive power of the organizations. Training refers to improving competencies needed today or very soon. In comparison, development refers to activities intended to improve competencies over a long period of time (Jackson & Schuler, 2003). The skills of the workforce and their ability to adapt to the rapidly changing economic environment are a key source of competitive advantage. Training of the employed is the key to achieving a flexible work force. In-work training has been defined as, the range of activities that are provided by agreement between employers and employees, either at the workplace or financed by or through the workplace. Training would be an important undertaking for HR, particularly in developing economies where it is seen as a major source of sustainable competitive advantage (Hatch & Dyer, 2004).
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh In Bangladesh all aspects of strategic HRM/D, training management, HR planning, personnel development and performance management require a committed and sustained public sector reform process to become a reality at the organizational level. A project located within a single department can not do this. The lengthy process of strategy development is a productive learning process for concerned personnel, the legacy of which, may be future initiatives once junior and middle ranking staff become promoted to senior decision and policy-making ranks. Reform in training management was successfully demonstrated within the boundaries of Rural Livelihoods Programme project log frames but was never successfully institutionalised. Too many barriers exist to coordinate projects and the organisations knowledge and skill development under one training management system (Brooks, A.C. & Brown, D.W. 2003)
Bangladeshi organizations specially BAT Bangladesh are taking more initiatives in people development through various training and development programs such as on the job training, of the job training, cross cultural training program, vocational training, job rotation etc. Their main target is to make their employees more compatible to gain maximum outcome. (BAT About us,2007) H4: Training and development programs will be able to gain sustainable competitive advantage at BAT Bangladesh.
Compensation Strategy of HRM: Compensation is the approach to provide monetary value to employees in exchange for work performed. Standard or formal compensation mainly consists of Base pay, Commissions, Overtime Pay, Bonuses, profit sharing, Merit pay, Stock options, Travel/meal/housing allowance, Benefits may include: dental, insurance, medical, vacation, paid leave, retirement pay etc. In case of monetary incentives Top executives usually receive 50-100% of their base salary, VPs & Directors get 30-50% of base, Midlevel managers receive 20-30% of base, Supervisors 10-20% of base, and others Research Report 58
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh usually get 0-10% share of the basic. Other than that Top executives are also entitled to stock options, Mid and lower level employees are entitled to base pay, overtime, bonus, merit pay, allowances, and benefits. (Schwainsteiger, 2006). Strategic compensation is a significant contributor to different forms of competitive advantage - better business results, more effective performance, stronger capability, higher staff attraction and retention levels, heightened motivation and employee satisfaction (Ehrenberg R.G. and G.T. Milkovich1987). Drucker, Deming, Juran, Lawler, 1999 and others have challenged the thinking about management styles, performance appraisals, merit pay, team and individual reward systems, and the general way that we do business. In doing so, they have changed the problem from just selecting a compensation plan that "feels right", to first developing relevant, sound management and compensation philosophies. Benefits are often directed toward the male with a nonworking wife and children (Baker, 1991). Thus, basic benefits address family income security for a single wage earner family, and include benefits such as disability insurance, health insurance, retirement funding, and life insurance. However, employers are increasingly adopting non-basic benefits, such as flexible work arrangements, telecommuting, portable retirement plans, and corporate sponsored day care centers (Elswick, 2000). While nonbasic benefits are more likely to be offered by large organizations, such benefits are also found in smaller firms. For example, flexible work arrangements are relatively common in small businesses, and a significant number of small businesses also offer day care (Henneman & Berkely, 1999). In Bangladesh most employers want to develop a compensation & benefits structure with only three basic objectives: to attract, retain and motivate the best employees. But then they realize how hard it is to match employee expectations and market competitors salary structure with their own companys affordability. Employers and their HR Managers do not know how to balance all three and develop a structure which is both internally and externally equitable. So, in most cases, compensation management focuses on fire fighting and keeping tabs on what competitors are doing. In Bangladesh paying people becomes a necessity of business rather than a means to achieve an objective. Bangladeshi Research Report 59
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh employees also use compensation & benefits that they receive, as an indicator for who they are in an organization and what is their value in the organization. It is sometimes far removed from how much contributions they are making to the bottom line - more linked with the labor market supply and demand factors for their technical skills. In reality, while management of marketing sales, finance and production has undergone massive changes in the past decade, many companies continue to use traditional, out-of-date systems for compensation. But compensation & benefits structure can become a vital tool that allows employers to equitably and consistently implement their programs in order to achieve the organizations objectives. Organizations that will emerge winners from the current economic development instability are those that are now focusing on best practices for compensation management. (I.A. Chowdhury, 2008) H5: Compensation strategy will be able to gain sustainable competitive advantage at BAT Bangladesh.
Workers Participation Strategy of HRM: The concept of workers participation at the workplace historically evolved with the emergence of industrializing capitalist societies as early as the Industrial Revolution, as workers struggled to gain control of the labor process and to democratize workplace management. Since then, workers have participated in decisions affecting their working conditions at various times in countries with capitalist systems, and later, in those with socialist systems. There is a vast volume of scholarly literature on workers participation at the workplace. Arguments in favor of workers participation can be briefly summarized as follows: 1) it can improve workers efficiency and productivity; 2) morally and ethically it satisfies human needs for creativity, achievement, social approval, social justice, and freedom from domination; and 3) it can extend democratic principles from the political sphere to industry ( Verma, R.K. and Syha P.R.(1991). The thought that the participation of workers in management is inevitable in the process of decision making for higher productivity in micro and macro level and for the smooth Research Report 60
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh functioning of industrial democracy has gained much strength today. It is because of the realization that labor is not only the factor of production; it is also a sensitive human element. Workers' participation in decision making will, if implemented sincerely, honestly and effectively with a welcome approach by the employer, certainly produce two immediate effects - one in productivity and the other in industrial relations. The increasing productivity and sound industrial relations will work hand in hand to ensure smooth functioning of economy and industrial democracy (Gardell B. 1982). Increases in workers participation in the managerial decision and their empowerment, as an outcome of economic self-sufficiency, are possible to achieve in the future within the expected change in the export structure and growth. If Bangladesh is successful in making necessary adjustments in the garments sector and expands its export in new areas it may create opportunities for workers and can achieve peaceful environment in the organization. Worker perceptions in Bangladesh revealed that they should be more informed about the internal and external performance of companies. More and more consultation should be held with workers to address their concerns. This would enhance employee confidence and improve company image. Labor issues should be given greater priority to improve livelihood of the workers (Rahman, Mustafizur 2002) H6: Workers participation strategy will be able to gain sustainable competitive advantage at BAT Bangladesh.
Industrial Relation Strategy of HRM: Industrial relations are the relationships between employees and employers within the organizational settings. The field of industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union. Research Report 61
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated (Hirst and Thompson, 1996). IR will require, in a new organization of work, to be built on a basis of co-operation and new forms of IR have to be developed, including greater participation by employees, since efficient production requires enhanced levels of both trust and commitment in firms (Batt, R. 1999).The term industrial relations have a broad as well as a narrow outlook. Originally, industrial relations were broadly defined to include the relationships and interactions between employers and employees. From this perspective, industrial relations cover all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations. Accordingly, industrial relations pertains to the study and practice of collective bargaining, trade unionism, and labor-management relations, while human resource management is a separate, largely distinct field that deals with nonunion employment relationships and the personnel practices and policies of employers
(Grimshaw, D. and Rubery, J. 2003).
Industrial Relations Ordinance, 1969 deals with trade union in Bangladesh. In any industrial and commercial establishment, a trade union may be formed with 30% of the total number of workers employed. If there is more than one union in any establishment, Collective Bargaining Agent is determined by the Registrar of Trade Union through sector ballot for a term of two years. Only the Collective Bargaining Agent is authorized to raise industrial disputes and negotiate with the management. The Director of Labor of the government acts as the Registrar of Trade Union in Bangladesh. Till December 1996; 4955 trade unions (worker's union - 4104 & employers association- 851) exits in Bangladesh having 17, 30, 927 members. Industrial Relations Ordinance, 1969 provides that any worker or employer/ has the right to form a union/association without previous authorization. But such a union/association can not function as a trade union without being registered under the law. The constitution of Bangladesh has recognized fundamental rights of the workers at work places including necessary social protection. Globalization and changing economic condition influencing traditional workplace Research Report 62
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh values, nature of employment, working condition, welfare facilities, industrial relations and contemporary social protection system. (Mondal, Abdul Hye, 2000). H7: Industrial relation strategies will be able to gain sustainable competitive advantage at BAT Bangladesh.
Methodology
The data were obtained from British American Tobacco Bangladesh, which is a multinational operating in Bangladesh. The studys main variables are CSR, HRM and Sustainable competitive advantage. From these variables 8 dimensions were created. This research is essentially exploratory in nature based on a review of the existing knowledge. A total of 115 randomly chosen respondents from inside the organization were surveyed. An online version of the questionnaire would be sent to their lotus notes. I will try my level best to designing the survey instruments capable of generating credible and reliable data. Primary sources were the biggest source of information in the research. The analysis is based on the primary source which is, the questionnaire was based on seven dimensions of strategic HRM & CSR and one dependent dimension which is the consequence of applying these variables in the organization is the sustainable competitive advantage. Also I would be using different reliable and applicable data analysis techniques which would help me to test the hypothesis. After the completion of collecting data from the BAT Bangladesh, the main task was the data analysis part of the report, which was a massive task in order to find the result whether our hypothesis about strategic HRM was correct or not. For the accomplishment of the statistical data analysis procedure SPSS (Statistical Package for the Social Science) was used which is a popular statistical software used by commercial, government and academic organizations to solve business and research problems. Independent Variables: Research Report 63
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh For the purpose of analyzing data in the questions were divided on the basis of independent variables which are Afforestation, Free Primary Health Care, Community Services, Training and Development, Compensation, Workers Participation and Industrial Relations. Through these independent variables the dependent variable was created. Organizations can gain sustainable competitive advantage through the HRM and CSR strategies. Previous researches covered in the literature review part have evidences that how these variables have an impact on SCA. As part of this empirical research survey was done on the employees of British American Tobacco Bangladesh. Respondents were asked to give their perception on a likert scale type questionnaire. Similar perceptual scales have been commonly used in studies of HRM practices and organizational performance (e.g. Delaney; Huselid et al., 1996). The list of items in (see Table 1) were also used in previous studies to determine the relation between the variables with sustainable competitive advantage. Dependent Variables:
In this research the dependent variable is sustainable competitive advantage. The independent variables are constructed to determine if they have a positive effect on gaining sustainable competitive advantage. This measure is desirable since these strategies have gained utmost importance in the recent times. Additionally, prior research
has shown that Corporate Social Responsibility and HRM correlate well with objective sustainable competitive advantage ((Porter, M. and M. Kramer (2006). Sustainable
competitive advantage is the unique position that an organization develops in relation to competitors that allows it to outperform them consistently (Hofer and Schendel, 1978). BAT Bangladesh also has uniquely positioned itself which enables them to outperform and also may be to gain sustainable competitive advantage. Respondents were asked through the designed questions about what and how the strategies used contributes to sustainable competitive advantage.
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Results
The first step that was carried out was the factor analysis; with varimax rotation on the individual CSR and HRM items (see Table 1). Datas were reduced, compiled, and extracted into principal components, where the individual questions of each variable were sorted by size. This helped in data reduction to identify a small number of factors that explain most of the variance observed in a much larger number of manifest variables. The factor once reduced then we used a factor weight of 0.40 as minimum cut off and were then tested for reliability. From the first factor afforestation has a Cronbachs Alphas ( = 0.64) which is above the reliability level 0.40. Through principle component analysis we found each of the questions alpha values were determined and used to explain most of the variance observed as a result certain items were disregarded named as residual items. The second factor Primary Health Care Support has a Cronbachs Alphas ( = 0.81). This means that this variable has a high reliability since the coefficient of reliability is high also this value is much higher than the suggested reliability level. Community Services has a Cronbachs Alphas ( = 0.69). This means that the data obtained for this variable has a high reliability level. The 4th Factor Training and Development has a Cronbachs Alphas ( = 0.75) which is reliable can be used to determine the impact of T& D on Sustainable competitive advantage. From this dimension 7 items were regarded each having its own alpha value above the factor weight and can be used for other tests and 3 items were disregarded. The 5th factor Compensation has a Cronbachs Alphas ( = 0.64) which is relatively high. From this dimension only 3 items having alpha value above the factor weight were regarded and rest of the items was disregarded as their values were beyond the minimum cut off point. The 6th factor Workers Participation has a Cronbachs Alphas ( = 0.92). The coefficient of reliability is very high comparatively and can be very well used to determine the impact of this variable on the dependent variable. From this dimension 9 items were regarded and 1 was being disregarded as its value was below the cutoff point of alpha value 0.40. The 7th factor Industrial Relations has a Cronbachs Alphas ( = 0.82) which is means that the reliability coefficient is high, and this variable can be used to obtain sustainable competitive advantage. Finally comes the last factor which is the Dependent variable of the study Sustainable Competitive Advantage. This Research Report 65
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh variable has a Cronbachs Alphas ( = 0.70) higher than the suggested reliability level. From this dimension 9 items were regarded and 1 item was sent to the residual item as its alpha value was less than the cutoff point. Together these independent variables provide a broad assessment of perceptions of Sustainable competitive advantage. Table 2 provides the means, standard deviations, and bivariate Pearson correlations for the main variables. Consistent with much prior research on the relationship between CSR and HRM practices effect Sustainable competitive advantage some of the independent variables have significant positive correlations on SCA while others do not have significant relationship or is not correlated. 2 of the CSR and 1 HRM strategies are positively and significantly correlated. These are Primary Health care support which is positively and significantly correlated with a value of 0.71(**) Community Services with significance level of 0.84(**) and Training and Development with a significance level of
0.51(**). This
provides us with some support for our hypothesis. Other variables such as
Compensation and Industrial Relations are positively correlated and afforestation and worker participation negatively correlated but these variables do not have a significant relationship with sustainable competitive advantage. Also Department which is a control variable is negatively correlated with SCA (at p<.05). Table 3 shows the results of the regression analysis for the independent variable on sustainable competitive advantage. Regression analysis was used determine the relationship of the variables with sustainable competitive advantage to test our specific hypotheses. From the independent variable 3 out of 7 has a significant relationship with sustainable competitive advantage. The standardized beta coefficient is negative for afforestation and it is negatively but significantly related with SCA. This means that with the increase in afforestation the effect on SCA decreases. Primary Health Care and Community Services are positively and significantly related which means that the effect on SCA is increased as these initiatives increases. It can also be seen that the control variables, firm size was negatively but significantly related with Sustainable competitive advantage indicating that smaller firms slightly outperform the larger firms in our sample. Research Report 66
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh The model 1 was highly significant, with an R2 of .823 and an adjusted R2 of .800. This indicates a high ability of the explanatory power of the predictor variables in explaining the variations in the dependent variable (sustainable competitive advantage) In conclusion, consistent support was obtained for our hypothesis H2 ( Primary Health Care Support) , H3 (Community Support), H4 (Training and Development). Like much previous research, our results provide mixed support for the importance of HRM and CSR strategies in gaining sustainable competitive advantage. In table 4 the Eigenvalues has been explained. The (Eigenvalue) above, we find the variance on the new factors that were successively extracted. As we can see, factor 1 accounts for 29 percent of the variance, factor 2 for 36 percent, and so on. The scree plot of each of the variables are provided in table 5 which illustrate a simple line segment plot that shows the fraction of total variance in the data this also shows the sorted eigenvalues, from large to small, as a function of the eigenvalue index.
Discussion and Conclusion

The results of this study provide moderately strong support for the existence of a
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh positive relationship between CSR and HRM practices and policies with sustainable competitive advantage at BAT Bangladesh. The value creation capability of HR practices within a firm is vital to firms performance. The source of sustained competitive advantage lies in the human resources practices used to attract, utilize, and retain them (Boxall, 1996; Wright et al., 1994). HR practices can be a source of sustained competitive advantage, but for that HR practices has to be rare, inimitable, and non substitutable (Barney, 1991). Michael Porter and Mark Kramer state in Harvard Business Review that if corporations were to analyze their prospects for social responsibility using the same frameworks that guide their core business choices, they would discover that CSR can be much more than a cost, a constraint, or a charitable deedit can be a sources of opportunity, innovation, and competitive advantage. From this study it has been found that some of BAT Bangladeshs CSR and HRM Practices contribute positively towards Sustainable Competitive Advantage while others have little potential for being a source of sustained competitive advantage. Consistent with much prior research on the relationship between CSR and HRM practices effect Sustainable competitive advantage some of the independent variables have significant positive correlations on SCA while others do not have significant relationship or is not correlated. Primary Health care support Community Services and Training and Development is positively and significantly related other variables such as Compensation and Industrial Relations are positively correlated and afforestation and worker participation negatively correlated but these variables do not have a significant relationship with sustainable competitive advantage. It is determined from the study that a positive and significant relation exits between Free Primary Health Care Support and sustainable competitive advantage. The finding provide preliminary support for Hypothesis 2 and suggest that, other things being equal, a CSR system focused on enhancing primary health care support in Bangladesh is a valuable approach for attaining sustainable competitive advantage. Health care is inaccessible for many Bangladeshis. Almost half of the countrys population lives below the poverty line, often in makeshift shelters with inadequate sanitation. Flood- prone areas are subject to waterborne diseases. In Bangladesh, the status of healthcare is similar to the one of many Research Report
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh developing countries: medical practitioners in Bangladesh often operate in relative isolation, dealing with diverse health care needs. Worldwide there is difficulty in retaining specialists in non-urban areas. The distribution of specialists in Bangladesh is indeed uneven. Tertiary care hospitals are also concentrated within the capital and few other major cities with large segments of the population having no access. (Khan, Naila, 2008) It is noted that the highest number of problems (22%) in health sector are related to inadequate number of physicians, wrong treatment, negligence towards patients, and absence from duty and unwillingness of doctors to stay at rural areas and small towns. The other problems are related to supplies, equipment, beds etc (21%). Some other major problems often discussed also include lack of ambulance services as well as proper referral services (Prince, MR, 2001). BAT has identified the right need of the people of Bangladesh and this will enhance the companys reputation and goodwill and will position the company into a responsible company. Organizations all around are coming forward to engage themselves in providing heath care services to the deprived in order to gain sustainability. According to CSR center in Bangladesh multinationals like Unilever, Standard chartered Bank, Grameen Phone, Dutch Bangla Bank has all kept primary health care support in the top list of their CSR initiative. Also there needs to be a balance between the CSR activities in order to maintain a positive impact on sustainable competitive advantage (M Alimullah Miyan, 2006). For sustainable development it is necessary to ensure that all relevant sectors (e.g. labor, environment, education) factor health support into their agendas. (C. James S. Morris, R. Keith et al. 2005) Primary Health Support is the major initiative undertaken by BAT to complement the development effort made by the Government. This initiative by BAT Bangladesh will significantly contribute in achieving Sustainable competitive advantage. The ultimate success of an organization depends on its contribution towards the development of the country, which ensures better economy and thus greater opportunity for business. The result obtained from the study also supports hypothesis 3, it can be determined from the study that community services have a positive and significant relationship with sustainable competitive advantage. This means that if a company has Research Report 69
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh other things being equal a company if has community services included in their CSR initiative and the more they get involved in providing such services they will be able to gain sustainable competitive advantage. BAT Bangladeshs CSR in can also contribute a lot to community development. Many corporate houses are coming forward such as DBBL, Unilever with their variety of community services. They can develop the community by creating employment, providing primary education, contribution to infrastructure development like road and high-ways and addressing environmental concerns. This is more relevant for a country like Bangladesh where the government interventions in these fields being augmented by corporate alliance can go a long way in developing the economy, society and environment. Community involvement increases cooperation, communication and contact between participants and others, which fosters trust and further communication in future; It gives a greater sense of identification with the local area and a greater mutual tolerance of the constraints faced by the others involved; and thus a sense of partnership arises(McGregor et al. 1992). BAT Bangladesh has undertaken a varied Community Services program with a number of interventions to promote sustainable development within the rural village community. They doing a wide array of community services but is not gaining even a minimum amount of visibility. Community involvement is very vital for a companys goodwill and many organizations are coming forward with such initiative (BATB Fact sheet, 2007).This initiative if implemented properly will have a huge positive impact on gaining sustainable competitive advantage. Training and development is a field that has a positive correlation in attaining a competitive edge. Training and development has a positive significant relationship with sustainable competitive advantage. The finding is a support for Hypothesis 4 which suggest that, other things being equal, an HR system focused on enhancing human capital by providing training and development can attain sustainable competitive advantage. Without training the people of a country and thereby an industry, it would be impossible to attain what is wanted. Training would be an important undertaking for HR, particularly in developing economies where it is seen as a major source of sustainable competitive Research Report 70
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh advantage (Hatch & Dyer, 2004). BAT Bangladesh is reputed as the employer of choice and this is because they recognize that getting the right start is crucial to building a successful career. This is how they approach their early training and career development program. Their training has a series of phases which starts with Induction, Functional Development, Managerial Development, Business Awareness and ends with Performance Appraisal. Investments in employee training may also be important for BAT striving to achieve a competitive advantage through high-quality products and services, in a developing country like Bangladesh. (BAT about us, 2007)
Our results are in line with most previous research (Ehrenberg R.G. and G.T. Milkovich 1987) that compensation is a contributor of competitive advantage. This study supports the hypothesis 5 partially as the result indicates that there exist a positive relationship between compensation and sustainable competitive advantage but does not affect it significantly. Organizations are
challenged with attracting, retaining and engaging employees; organizations are pursuing a long-term approach to employee development. BAT Bangladesh is more concerned in these issues to retain their talent pool and make them more motivated towards the organization. It is evident that if there is a better compensation for the employees and workers of an industry, then there will definitely be a competitive edge, compared to the neighboring countries. However, in Bangladesh there still lacks proper compensation practices and skills, for which reason it can be interpreted that there is a negative relationship between these two variables. BAT Bangladesh is still following a uniform and prehistoric compensation system and they have not evolved their compensation package compared to other BATs around the globe. This is why the employees or the workers are not satisfied with the overall compensation package and which is why it does not have a significant relationship. In many instances, declining performance and turnover problems are related to weaknesses in the organization's compensation and benefits package. Those weaknesses, primarily the lack of individual rewards and the ineffectiveness of system rewards, may be addressed by the organization through a reevaluation and redesign of the organization's pay and benefits package. The expected results of such a redesign include improved morale, increased productivity and a higher retention of satisfactory employees (White, William L. and Becker, James W, 1980). A Research Report 71
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh Proper and well designed compensation package will contribute positively towards attaining sustainable competitive advantage. Industrial relations do have a strong and a positive relationship in BAT Bangladesh. It is evident that proper industrial relations would cause a sector and an industry to flourish. However, in the context of Bangladesh, these Industrial relations are not yet as strong as they are in other countries. This could be seen from our study as well as , even though there is a strong and very positive relationship and understanding of this among the people, there is still les significance of this in the context of Bangladesh. Industrial relations do have a positive relationship with competitive advantage which is in line with previous research of (Hirst and Thompson, 1996). The result only partially supports the hypothesis 7. It is evident that proper industrial relations would cause a sector and an industry to flourish. However, in the context of Bangladesh, these Industrial relations are not yet as strong as they are in other countries. This could be seen from our study as well as , even though there is a strong and very positive relationship and understanding of this among the people, there is still les significance of this in the context of Bangladesh. As a result new forms of IR have to be developed, including greater participation by employees, since efficient production requires enhanced levels of both trust and commitment in firms (Batt, R. 1999. The positive relationship does indicate that BAT Bangladeshs Industrial relation is strong and has the capability to have a positive impact on sustainable competitive advantage. It is determined from the study that a negative relation exits between afforestation and sustainable competitive advantage. This result is contradictory and rejects hypothesis 1 and also the theory of the conceptual model developed. The significance level says that there is a strong negative correlation between the variables. This is because people are not that much aware of BAT Bangladeshs CSR initiatives. People have a notion that BAT Bangladesh being a tobacco producing company is harming the environment and cutting down trees in order to burn them and treat their tobacco leaves. Also they are harming the farmers community by making them cultivate tobacco. People are not aware that BAT Research Report 72
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh Bangladesh's afforestaion initiative is benefiting the whole country and the farmers community both environmentally and economically. BAT believes in sustainable development and is the pioneer in establishing afforestation programme. Bangladesh began its afforestation programme to compensate for wood burning in tobacco curing. They are aim is to make a greener Bangladesh. Not many people are aware of their intention and also inside the organization employees from other department other than CSR have very little knowledge about companys CSR initiatives. Due to lack of knowledge of what afforestation is and how it is benefiting the country as a whole the result is such bizarre. Through the literature review it can be understood that afforestation brings in sustainability and organizations who is the pioneer of taking such a noble step for the country will gain competitive advantage. This keeps BAT Bangladesh in the upper hand from other companys involved in CSR activities. If BAT Bangladesh properly publicizes their afforestation initiative then the company can gain SCA by investing more on afforestation program as part of their CSR activities. But other initiatives will also have to be there in their CSR activities for the company to sustain in the long run. From the results it can be determined that Workers Participation has a negative relationship with Sustainable Competitive Advantage. This result is also contradictory and rejects hypothesis 6 and the conceptual model developed. Workers' participation in decision making will, if implemented sincerely, honestly and effectively with a welcome approach by the employer, certainly have a positive impact on SCA. Most industrial relations scholars (especially in the US) seem to stress the degree to which workers participate in decisions related to their own work, thus increasing workers involvement and responsibility and as a result competitive advantage in the longer run. Individual specialized work has been progressively substituted by collective work team and workers involvement groups functions (Batt, 1999; Ichinowsky et al., 1997; Osterman, 1994 and 2000). Workers participation will increase their loyalty and dedication towards the organization which in turn will benefit it in the longer run. In BAT Bangladesh there is workers participation but not to an extent that it would contribute to sustainable
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh competitive advantage. But this may have to go a long way and needs to be implemented properly and effectively to have the utmost results. From the analysis of the data collected during the survey and the evidences from the dialogue sessions of the social report, it can be said that British American Tobacco is doing a praiseworthy job in the Corporate Social Responsibility sector but is lacking the effectiveness and visibility due to limited communication (stated based on the responses of the stakeholders at the dialogue session of Social Reporting Cycle 2). The company wants to establish itself as a benchmark company in CSR activity. To gain this the company needs to focus more on the communication of the brilliant Corporate Social Responsibility initiatives that the company is undertaking. The company should be more vocal about its achievements and in turn gain effectiveness, visibility and hence appreciation. British American Tobacco is one of the reputed multinational companies in Bangladesh. They have continued their business with good reputation. As a leading company they always try to maintain the highest quality of their products. Their human resource department is strong & treats their employees as an asset. BAT has already earned reputation as a very potential Multinational Company of the country. This has been possible due to skilled manpower, which has been developed by taking proper recruitment and selection strategies and giving sufficient training and development opportunities and also retaining their employee through providing adequate compensation and benefit .We write in no uncertain term that BAT is functioning very well and we hope that it will continue its operations and will become the trendsetter of the Human Resource Management practices of Bangladesh.
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Recommendation & Implementation

From the analysis it can be determined that BAT Bangladesh is needs to design and modify some aspects of their HRM and CSR strategies so that it can help BAT Bangladesh gain sustainable competitive advantage. In this study I came up with certain recommendations which might be helpful for the chosen organization. However, the chosen organization, British American Tobacco Bangladesh is one of the biggest Research Report 75
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh multinationals in Bangladesh. It is always considered that the multinational organizations business practices would be better and efficient comparing to the local organizations. BATB, as a multinational has a standard business practices for its own. Following are some of the few recommendations given to BATB:
Afforestation
BATB should strengthen the afforestation program outside its growing region and publicize it more. British American Tobacco Bangladesh is doing a praiseworthy job in the afforestation of the country. But British American Tobacco Bangladesh can expand the afforestation program to other areas apart from the growing region. This is advised as engaging in afforestation only in the growing regions might give the general people an idea that BATB is doing it only for their business need (woods was a major source of fuel used in tobacco curing, though BATB is now encouraging the use of other alternatives like hush or hay). If the afforestation is done beyond the growing region, the effort will gain visibility as a social contribution. They should also create awareness inside the company between their employees. Also design the program in such a way so that the employees from different departments can participate in their CSR activities. Hence BATB will be able to achieve its goal and can be recognized as a responsible company With the enactment of the new law and the other laws prevalent for the company many doors of communication is being shut down for BATB. However the company should not hold back the communication of the good that it is doing for the society. Recently BATB has made its presence felt through TVCs on Afforestation and Dishari. The company has many success stories to tell and thus can introduce documercials in the electronic media. Brining out the success stories and revealing them to the general mass will help BATB gain more effectiveness and visibility of the CSR activities that the company is undertaking. Research Report 76
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh Free Primary Health Care Support
Increase investment in the health sector and extend their services to more underprivileged people. As it has been observed from the research that health sector is one of the sectors in which stakeholders expects a company to invest most in. Through the social reporting process and the dialogue sessions BATB has come to know that it stake holders expects the company to invest a lot in the health sector. One issue is that as BATB is operating in the end market that sells a risky product the company should thus be present more strongly in the health sector, as per the expectation of the stakeholders of the company. At present BATB is providing health assistance to its growers and has recently increased the span to bring the farmers family under the umbrella of the Surjer Hashi services. They should also extend their services to other deprived community hence not only providing services to their farmer community. This will create goodwill and BAT will get better visibility.
Community Services
BATB should increase investment in providing a wide array of services under their community services program. British American Tobacco Bangladesh is doing a wide array of community services but is not gaining even a minimum amount of visibility. One reason is that the company is spending too much on other initiatives and too little on this. This discrepancy can pull the average performance down. Thus the company should invest Research Report 77
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh in all the initiatives with equal importance and urgency. Other multinational companies in Bangladesh are spending a huge amount on their CSR activities and focusing more on Community services. BAT Bangladesh has a very narrow focus on the community services and that is why it is the least visible compared to other initiatives.
Training & Development
BAT Bangladesh should modify their training facility and focus more on Off-theJob Training. This type of training gets employees away from their work environment to a place where their frustrations and bustle of work are eliminated. This more relaxed environment can help employees to absorb more information as they feel less under pressure to perform. This type of training can be a source to supply the latest information, current trends, skills and techniques for example current employment legislation or other company law and regulations, current computer software or computerized technologies or improved/innovative administrative procedures. These new skills can be brought back and utilised within the company. On the job training is always preferable but HR managers also have to think about the feasibility and cost minimization thing. Off-thejob training like classroom lectures, workshops, presentations, and other simulated situations can be arranged for training of the employees to keep the cost minimal. BATB has expensive member of training, which is very useful for their employees skill development. But training should be given in a regular basis and to save time, only needed training should be given to the employees.
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh Nonetheless there is no alternative for continuous training and development to protect the employee competence from becoming obsolete, and for that performance-based training can also be a handy option. Compensation Strategy of HRM
BAT Bangladesh should wrap up their old compensation system and come up with a new Cafeteria Style compensation system. A very important aspect to keep employees satisfied and motivated towards work is compensation. There is no alternative to keep your employees happy other than a complete compensation package. From the survey I found out that the base pay is more or less satisfactory with the majority, but the discrepancy arose mainly with the benefits and other fringe benefits. So for that case our group suggests a policy which is called Cafeteria Style system. In this system, the employees are allowed to choose from a menu of benefits, i.e. health benefits, insurance, dental, which is custom made for each and every individual employee according to their choice. Cafeteria style benefits provide employees the opportunity to choose among a variety of benefits that best fit their personal and family needs. Employers get the most value for the money spent if employees choose only those benefits that they need. Benefit dollars are wasted when everyone gets the same package whether they need it or not. By implementing this system, the employees will be happy as they are getting what exactly they need and the company also does not have to incur losses by pushing the benefits which are not wanted thus leading the pathway towards sustainable competitive advantage.
Industrial Relations
BAT Bangladeshs Industrial Relations should be based on mutual recognition, trust and good faith. Research Report 79
Industrial Relations is a crucial issue for the sustainable competitive advantage of the organization or the organization as a whole. HR managers must be very careful in portraying and establishing the environment within the organization. Employee suggestions, grievances and complaints must be given utmost importance to and should be made sure that it is delivered to where it was intended. Two way communications must be ensured.
Workers Participation
An attitude of mutual co-operation, confidence, and respect for each other should be fostered, and Management, in particular, should be genuinely receptive to the labors ideas. Participation provides education to workers in the management of industry. It fosters initiative and creativity among them. It develops a sense of responsibility. Informal leaders get an opportunity to reinforce their position and status by playing an active role in decision-making and by inducing the members of the group to abide by them. Workers participation in management means giving scope for workers to influence the managerial decision making process at different levels by various forms in the organization.
Sustainable Competitive Advantage
BAT Bangladesh should design and implement their HRM and CSR strategies in a way that increases their chances of gaining sustainable competitive advantage.
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh BAT Bangladesh is a company with unique skills and resources and they are working to implement strategies that competitors cannot implement as effectively. BAT Bangladesh should understand their competitive advantage which is critical. If they do best in this then it will draws customers towards and not towards competitor's. Extremely successful companies deliberately make choices to be unique and different in activities that they are really, really good at and they focus all of their energy in these areas. BAT Bangladeshs CSR and HRM Strategies can make them gain sustainability. CSR contributes to competitiveness by enhancing the long-term sustainability of business. It fosters relationships between companies, trade unions and non-governmental organizations as well as with those directly involved in the company, customers and the public in general. Strategic HRM practices can enhance the competitive advantage of businesses. An integrated Human Resources strategy should be set which will combine from top to bottom, from left to right, and will take into account all the small and petty details in to consideration. The HRM system should promote real advantage, then HRM should be fully integrated into both the formulation and implementation stages of the strategic management process so that it can have a direct impact on Sustainable competitive advantage.
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh Arnold, P. and Cole, I. (1998) Community Involvement and Sustainable Neighbourhood Regeneration, Ch. 10 in Cooper, C. and Hawtin, M. (Eds) Resident Involvement and Community Action: Theory to practice, Coventry: Chartered Institute of Housing. H. Atakul, Corporate and Social Responsibility (CSR) The Bangladesh Accountant, July - September 2008, pp. 33 Batt, R. (1999) Work Organisation, Technology, and Performance in Customer Service and Sales. Industrial and labour Relation Review, 52(4), 539-559. Barney, J.B. "Firm Resources and Sustained Competitive Advantage." Journal of Management, 17(1), 1991, pp. 99-120. Baker, L. E. (2000). Cafeteria Compensation (flexible benefit plans), Across the Board, Vol. 28, No. 12, pp.48-54. Becker, B.F. & Hueshield, M.A. 1998. High Performance Work Systems and Firm Performance: A Synthesis of Research and Managerial Bulfin, M. 1987b Determining the role of private Forestry on highly productive forest sites inagriculturally disadvantaged areas. Final report for Europeen R & D programme Wood as arenewable raw material. An Foras Taluntis, Kinsealy Research Centre, Malahide Road, Dublin 17, Ireland. 215 pp Brooks, A.C. & Brown, D.W. (2003) Training and Development in the Department of Fisheries, The FTEP-II Experience. June 2003. Dhaka, Bangladesh. Barnett J, Coyle P. 1998. Social inequality and general practitioner utilisation: assessing the effects of financial barriers on the use of care by low income groups. NZ Med J 111: 6670. Research Report 82
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh Harrington, A. (2005), In good company, responsible business, Financial Director, 20 Jul 2005. Hofer, C. and Schendel, D. Strategy Formulation: Analytical Concepts, (St. Paul, MN: West, 1978). Hr magazine, January, 1999. Senior Executives Decry Lack of Strategic Input.pp.21-22 I.A.Chowdhury, 2008. Necessity of Effective Communication About Salary and Other Benefits of Entry Level Positions: An Empirical Study. Implications,Research and Human Management, pp.53-101. Vol. 3, No. 1, January 2008 Ichniowsky C., Shaw K. and Prennushi G. (1997) The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines. American Economic Review, 87(3), 291-313. Jackson, S. E. & Schuler, R. S.(2003), Understanding Human Resource Management in the Context of Organizations and their Environments, Annual Review Psychology, vol.46, pp. 237-264. Joseph J. Martocchio, Strategic Compensation: A Human Resource Management Approach Study Guide; Publisher: Prentice Hall College Div; 2 Pap/Cdr edition (January 2001). Kester, G. 1999. Workers Participation, Trade Union Policy and Development. The Hague: Institute of Social Studies. Kaufman, B. E. (2003). John R. Commons and the Wisconsin School on industrial relations strategy and policy, Industrial and Labor Relations Review, 57: 3-30.
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CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh Lengnick-Hall, C.A. and Lengnick-Hall, M.L. "Strategic Human Resources Management: A Review of the Literature and a Proposed Typology." Academy of Management Review, 13(3), 1988, pp. 454-470. M. Shafiqul and M.Woli. Peoples Participation in Health Services: A Study of Bangladeshs Rural Health Complex Bangladesh Development Research Working Paper Series, 2009, pp 3
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http://www.who.int/whr/2006/fr/index.html, seen on 10 June, 2009 http://industrialrelations.naukrihub.com/introduction.html, seen on June 17, 2009 http://2006.confex.com/uicc/wctoh/techprogram/P6034.HTM, seen on June 20, 2009 Research Report 89
CSR and HRM Practices and Policies in Gaining Sustainable Competitive Advantage at BAT Bangladesh http://www.bat.com/group/sites/uk__3mnfen.nsf/vwPagesWebLive/DO539N5C? opendocument&SKN=1&TMP=1, seen on June 20, 2009 http://www.mcpfe.org/system/files/u1/meetings/Guidelines_Aff_Ref_ADOPTED.pdf, seen on June 23, 2009 www.thenetworktufh.org/download.asp?...BMJ%20Editorial%20Funding%20for %20primary%20health%20care, seen on Jun 25, 2009 http://www.communityinvolvement.org.uk/Index.html, seen on July 2, 2009 http://www.hrleader.net.au/articles/22/0c01d922.asp, seen on July 2, 2009
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Letter of Transmittal

(Mohammad Ataul Hoque, 2008). Corporate responsibility is achieved when a

1.1 Tobacco Industry and Environment

1.2 Competitive Scenario

1.3 Smoking Incidence

1.4 Tobacco Regulation

1.5 Tobacco Taxation

1.6 Cigarette Pricing

Price Slab (Taka) Premium 41+

Pack Price (Taka) 82.00 52.00

2.1 The History of BAT

2.1.2 Regional Operation of BAT

2.1.3 Regional Operation of Asia-Pacific

2.2 British American Tobacco Bangladesh

2.3 Product Profile

Source: BATB Figure1: Board of Directors

2.4.1 Corporate Culture

2.5 Demonstrating CSR

international standards of environmental, health and safety practice. Research Report 27

2.6 International Marketing Standards (IMS)

Table 3: Guideline for Interpretation of Standards Source: BATB

2.7 Distribution Network

2.8 Growth & Development Profile

Chart 1: Trends in Sales of BATB (2003 2008

2.8.2 Number of Products

Source: BATB Intranet

Historical background of the dimensions

Compensation is a systematic approach to providing monetary value to employees in

Workers Participation The thought that the participation of workers in management is

Sustainable competitive advantage Sustainable competitive advantage is the unique

Importance of the dimensions

Training and Development

Collection of Appropriate Data

Statement of the problem

Maintaining sustainable competitive advantage at British American Tobacco Bangladesh

Objective of the study

Sustainable Competitiv e Advantage

Discussion and Conclusion

Recommendation & Implementation

Training & Development

Sustainable Competitive Advantage

seen on July 4, 2009

http://www.hr-guide.com/data/G400.html, seen on July 8, 2009

www.botany.uwc.ac.za/.../afforestation.htm, seen on 25 July, 2009

www.communityinvolvement.org.uk, seen on 25 July, 2009 www.smarte.org/smarte/.../sn-community.xml, seen on 27 July, 2009

www.tomsofmaine.com/community-involvement/project-sponsorships.aspx - seen on 27 July, 2009

www.imation.com/.../Community-Involvement, seen on 28 July, 2009

en.wikipedia.org/.../Training_and_development, seen on 28 July, 2009

managementhelp.org/trng_dev/trng_dev.htm, seen on 2 August, 2009

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