Tata: Integrating Social

Presented By:
Responsibility with Jyotika Kundu

Corporate Strategy
 Contents
❖ Background

❖ Community Development Initiatives

❖ CSR as strategic initiative

❖ Institutionalising CSR
 Background
❖ Founded by Jamsetji Nusserwanji Tata (JN Tata) in 1868, the Tata group has developed
into one of India's largest business conglomerates. Tata Sons, which was established as a
trading company by JN Tata in 1868, is the promoter of the Tata group.

❖ The group has 80 companies in diverse sectors, and has been moving from product-driven
businesses to brand-driven businesses.

❖ The group listed its materials, chemicals, energy and engineering products as product-
driven while engineering services, automotive, communications and IT, services and
consumer goods have been identified as brand-driven businesses.
 Community Development
Initiatives
❖ A survey conducted by the website www.indianngos.com revealed that Tatas spent Rs. 1.5
billion on community development and social services during the fiscal 2001-02 - the
highest by any corporate house in India.

❖ A survey conducted by the website www.indianngos.com revealed that Tatas spent Rs. 1.5
billion on community development and social services during the fiscal 2001-02 - the
highest by any corporate house in India.Even when economic conditions were adverse, as
in the late 1990s, the financial commitment of the group towards social activities kept on
increasing, from Rs 670 million in 1997-98 to Rs 1.36 billion in 1999-2000. From its
inception, the Tata group has taken up a number of initiatives for the development of
society.

❖ A unique feature of the group is that 63 percent of the equity capital of the parent firm -
Tata Sons Limited - is held by Tata trusts, which are philanthropic in nature.
 Cont.
❖ The focus of these efforts in recent decades has been on building self-reliant communities and
working towards sustainable development. Grants are provided for community development
projects and to organizations undertaking research mainly for medical and educational
purposes.
❖ For instance, TISCO took up a community health program to help prevent the spread of AIDS
in Jamshedpur.
❖ Similarly, TELCO set up an institution named Nav Jagrat Manav Samaj at Jamshedpur to
provide healthcare for patients suffering from leprosy.
❖ Another group company, Tata Consultancy Services initiated a project for helping adult
illiterates learn using computers.
❖ The Tatas had initiated several labor welfare measures in their group companies even before
these were made mandatory by law. For instance, TISCO had in place an eight-hour working
day and a welfare department as early as 1917.
❖ Similarly benefits like provident fund, accident compensation to workers and maternity
benefits were provided to employees long before they became the norm.
CSR as a Strategic Initiative
 Institutionalising CSR
❖ JRD Tata, the son of RD Tata, who was a business partner and relative of JN Tata, strongly
believed that the CSR initiatives of the Tata group should be institutionalized and it should
not be left to individuals to carry them forward.
❖ To ensure that the CSR measures started by the group were sustained, a ‘social audit’ of
companies was also carried out.
❖ Each group company was required to frame its CSR objective/s and plan, which had to be
communicated to all the employees in the company. The CSR programs undertaken by
member companies had to be aligned with their core competencies and capabilities, besides
involving local partners in development like NGOs to help in their completion. The CEO
and operational heads acted as facilitators in the process. The integration of the CSR
initiatives of the various group companies called for greater involvement, requiring the
formation of a separate institution called the Tata Council for Community Initiatives
(TCCI).
 Cont.
❖ In 2000, TCCI also developed a CSR index called the ‘Tata Index for Sustainable Human
Development,’ which was adopted by fifteen group companies.
❖ The group companies were required to rate their performance on a scale of 0-1000. This
was called the scale of human excellence. The self-evaluation was based on criteria like
leadership commitment, strategy development, review mechanism, employee involvement,
volunteer schemes and managing change.
❖ The scale was further divided into five bands which included human consideration
(between 0-250, indicating the starting level of CSR), human concern (251-450, indicating
the evolution of its value system), human achievement (451-650), human development
(651-875) and human excellence (876-1000).
 Cont.
❖ In 2001, TCCI appointed one Corporate Head – Social Responsibility for each of the group
companies. This person was responsible for driving the CSR initiatives in the community
in which the company operated. TCCI’s effort towards community development was based
on a unique concept of volunteering. The volunteers were employees of different Tata
group companies, and were collectively known as the Tata Corps of Volunteers.
Cont.
 TBEM
❖ The TBEM is a tool based on the Malcolm Baldridge National Quality Award22. It aims to
facilitate the understanding of business performance imperatives, manage planning
activities and organizational learning, enhance organizational performance capabilities and
the delivery of results, recognize excellent performance and identifying and sharing best
practices.
❖ TQMS used four broad approaches for institutionalizing TBEM: Assurance, Assessment,
Assistance and Award.
Cont.
 Linking CSR and TBEM
❖ The first connect is at the Leadership level, where the organization is to analyze as to how
it address its responsibilities to the society and practices good citizenship.
❖ The next level is Strategic Planning where the organization has to see as to how it ensures
that planning addresses financial, societal, and other potential risks and that the strategic
objectives balance the needs of all key stakeholders.
❖ In the third level, the results for key measures or indicators of regulatory/legal compliance
and citizenship is addressed besides the other indicators of performance. Thus generic
business drivers such as leadership and planning link the economic imperatives with
environmental and social aspects at each distinct level.”
THANK YOU