Corporate social responsibility is seen as a duty imposed upon the company for the sake of the society at large as a method of ensuring that the company is doing its part as a juristic person to ensure that the society remains in good condition as a result of its activities. The aim of CSR mechanisms is to ensure an overall self-regulation on the company towards its activities, noting that they affect the people in their immediate environment. It is also referred to as the corporate conscience of the company (Wood, 1991). In analyzing the place of corporate social responsibility in the modern day business world, it has been noted that this has become a practice of marketability that enables the specific brand to have competitive advantage over its competitors because of the effect of the responsibility. Apart from the effect that an action of goodwill towards the society that a company will get, the corporate social responsibility efforts that the company puts into the production of services ensures that they can show their clients that they have better products based on better technology and more sustainable practices. This paper will look at the corporate social responsibility theories and how they have been applied to Tata, the Indian vehicle manufacturing company.
One of the ways that corporate social responsibility has helped for the positive publicity of companies is by participating in community-based initiatives such as the construction of schools or pubic sanitation programs. These have ensured that in certain communities, there is awareness of the contribution that such a company is making to the community, thus providing a loyal customer base for the company products and services. Furthermore, contribution to the community will often make sure that a manufacturing company will use its products for the improvement of the community. As such, there is a sense of ownership coming from the community concerning the nature of the company. There is need to note that the corporate social responsibility theory is a further step that companies take aside from what is required by law of them. For example, the law requires that a certain limit of environmental damage be done by a specific manufacturing company. However, when the company goes ahead and makes the extra step to ensure that the machines that they are using are energy conserving and low emissions are the results of their products, then such a company has embarked on a corporate social responsibility venture.
The concept of social corporate responsibility had not caught on until the 1970s. During this time, the US was facing major problems in terms of poverty and unemployment. The corporate world at that time begun to notice the need for a stronger involvement of the business entities at that time for the purpose of the betterment of society. The cry for the change of attitudes of business toward their treatment of society became more apparent in the turn of the millennium when the need became real. Businesses had to shift their focus to the issues in society in order to adopt an approach where there was an increase advantage for businesses which took public affairs seriously. As companies begun to take obligation to societal needs, there was an evident increase in the overall profitability of the company as such companies were associated with the benefit to society (McWilliams & Siegel, 2000). Despite critics of the idea stating that this was a diversion from the goal of business interactions, there has been evidence to show that companies practicing corporate social responsibilities have obtained profits from their application of the same. The following section will look at the application of CSR in Tata and the impact that it has had on the company.
CSR in Tata
In relation to the phenomenon of corporate social responsibility, the Committee on Economic Development identified that CSR was based on majorly three concentric and interrelated circles:
The inner circle this was largely based on the responsibilities and objectives of the company. These had to be met and were the primary goals of the organization in its activities of the marketplace.
Intermediate circle items in this section were done. However, due recourse was given to the changing moral and ethical standards of the society. As such, there was consideration of the necessary needs of society when doing these things.
The outer circle these are activities that the business carries out in the course of caring for social concerns that the company may have. These are completely new responsibilities that the company takes upon itself for the purposes of ensuring company reputation and survival.
Furthermore, the CSR was further classified in the application of this company so that there was different forms of responsibility and towards different parties. For example, the corporate social responsibility of the company towards itself was ensuring that the company ran sufficiently and efficiently towards profitability. The social and economic needs of the company were met in the responsibility towards itself. Efficient working of the business is the chief goal in this section from where all other norms of the responsibility towards self arise. Responsibility was also owed towards employees as members of the organization. The provision of hygienic environments of work, timely payments of remunerations, impartiality of treatment at work, recreational activities and the encouragement to take part in managerial activities and positions in the course of their work were some of the things that the company engaged in. furthermore, the uniqueness of the companys location and culture saw that it provided healthcare benefits to its employees through engaging them in yoga.
Corporate social responsibility also comes in different other ways such as the responsibility to the state, where the state is entitled to a part of the profits that the company obtains through the collection of taxes. Furthermore, the state imposes sanctions for the purpose of the smooth operation of business. This is also a part of the companys responsibility to ensure that such provision are followed. Furthermore, the company owes responsibility to the stakeholders for the purposes of ensuring the safety of their investments in the company. As such, the positive image of the company in the eyes of the public and the continued profitability are among some of the responsibilities that the company will have towards its stakeholders. In addition, there is responsibility towards the consumers and the environment. In the case of the consumers, its about ensuring that the quality of the products being produced remains high for the purpose of their safe consumption, while the balance is set with the environment. The product shouldnt be one that would adversely affect the operations of the environment. Ecological balances should be considered in the development of products by a company (Kumar, Negi, Mishra, & Pandey, 2012).
Analysis of CSR Models and their Application in Tata
In Tata, there has been identification of the application of three models of corporate social responsibility, namely: Carrols Model (Kenneth, 1971), Ackermanns model (Ackermann & Bauer, 1976) and Halals models (Halal, 2000). In Carrolls approach, the company views the corporate social responsibility as a 3D dimension task requiring the performance of the company. In this approach, Carroll sees the issue of CSR as the culmination of the duties that a company has. Four hierarchical obligations are necessary for the completion of the performance duty upon a company, namely:
Discretionary responsibilities they are the general contributions to the community that the company takes upon itself and are not necessarily part of the companys agenda. Such include community-based projects. These are the highest in the triangle.
Ethical responsibilities these are ones that the society expects that the company should follow and respect. They include the company engaging in malpractices such as hoarding that may be dangerous.
Legal responsibilities these are second lowest in the hierarchy, but also form some of the most basic compositions of the company, without which there would be no organization. As it suggests, legal duties require that the company adheres itself to set rules of the land.
Economic responsibilities the primary reason for the existence of the business or organization is for the satisfaction of the economic needs of its users and to provide the required surplus for the rewards of those who have participated in the successes of the company. It is the lowest on the hierarchy bur also the most primary need of the company.
Fig. 1: A representation of company responsibilities (Kumar, Negi, Mishra, & Pandey, 2012).
In Halals model, CSR is largely based on the resources that the company is able to gather towards the getting of resources necessary to engage in CRS activities. This is because the CSR venture is one that involves gathering of resources from different areas for the purposes of dealing with the problem at hand, which is the issue requiring CSR. As such, the need for CSR is for the sake of the survival and future interests of the company and its stakeholders. The company will thus approach CSR with the view of whether such an activity will be beneficial to the company or otherwise. On the other hand, Ackermans model is largely about involving a root cause analysis of the social problem at hand. The company thus engages itself in investigating the issue and finding ways of eradicating it through a team of specialists who can look at the issue in depth. Later, an implantation of the strategy can be taken for consideration.
The Tata group operates more than 80 companies across the world, making it one of the largest companies in Asia at the moment. It controls companies in the area of steel, software, automobiles among other areas. The area of control is thus huge, with around 200,000 employees in India alone. Tata has some projects that have to do with corporate social responsibility around the fields that it deals with.
Tata Tea is one of the projects that the company has aiming to aid the needs of special disabilities people in the region. Tata has taken up this initiative for the education and rehabilitation of children and adults with special needs in the region. As such, Tata has set up the Dare School and the Dare Preserve unit as some of the projects for the purpose helping people in need. The DARE program is largely involved with teaching basic academic skills to children in the region, some of who dont have access to education because of poverty and the further inhibiting special needs. The DARE Strawberry Preserve Unit, on the other hand, is a training program where the trainees are taught by the institution on how to make strawberry preserve, after which they become employees of the company, eligible for medical and health cover as well as a monthly salary. This program helps the youngsters of the region to become preoccupied by reducing the levels of unemployment. Other units within the organization exist for the purposes of distribution of the strawberries another paying job for youngsters, and a vocational training program for youngsters who wish to pursue other areas apart from entrepreneurship.
Tata Chemicals Ltd
This is also another subsidiary company of the Tata Group. While this company is more concerned with the chemical manufacturing industry, focus for this group is on sustenance, especially with regards to the environmental impacts that the industry would have. The company has overseen the activities of this manufacturer to ensure that the highest standards of sustainability are met durin...
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