CSR of Tata group vs Unilever and G E - Assignment Example

CSR of Tata group vs Unilever and G.E Introduction Sustainability or social responsibility is a term that has long been associated with corporate. The corporate are expected give back to the society. However the concept of corporate social responsibility as a concept is rather a new one. Although the concept of corporate social responsibility has been a rather new one it has been practiced by some corporate since long. However in recent years the rules and regulations that guide corporate social responsibility has increased as governments have increased and tightened their norms on these matters and enforced rules and regulations by which the corporate must abide. Corporate social responsibility as a concept is different in different countries and is also defined differently and seen differently by different corporate. In the following report the approach to sustainability from the view point of general electric and Hindustan Unilever is contrasted with that of Tata group. Discussion In India it has been traditionally the fact that corporate social responsibility has been seen as a mechanism by Indian firms to contribute to social good and social development. The concept that the firm and the society are interrelated has been the cornerstone of Indian society and thinking and is not a new concept in certain Philosophy (Hopkins, 2012). The notion of the interrelatedness of the Indian Corporate and Indian society find its mention in the Vedic philosophy and the Bhagavad Gita with these scriptures mentioning the important contribution to the greater good of the society by the corporate (Baxi and Prasad, 2005). The Tata group which is based in this Indian philosophy and mindset at the centre of its belief system has embraced this philosophy of corporate giving more than a century ago. Indian corporate has gladly accepted their responsibilities to the society and has gladly contributed to the well being of the communities (Crowther and Aras, 2008). However, corporate philanthropy on a local scale by the corporate has traditionally focused on investing in the welfare of the employees and in the welfare of the communities where the corporate conduct their business (Hancock, 2004). While there are some corporate that focus on minimizing the harm caused to the environment and employees by following safety, health and environment guidelines (FSG, 2011). While these are important in the context of social responsibility, they are primarily limited to minimizing the organizations own footprint and are not linked towards large scale social progress. In other it is most important that they leverage the core competencies in order to contribute and solve problems that are overall linked to the society. The Traditional focus on corporate social responsibility by the companies was regarding the company’s focus on the matters of social responsibility (Schwartz, 2011). Earlier the company’s main focus was to engage in social responsibility initiatives that dealt with only better future for the employees of the company and the environment of the company. However, those approaches have changed now days (Kotler and Lee, 2011). For example in view of the earlier corporate social responsibilities norms a company manufacturing hygienic soaps would have earlier used recyclable materials in production or would have treated employees fairly in the production and manufacturing process. In order to feature inclusive strategic objectives the company would have employed differentially able individuals. However that focus is changing slowly as is evidenced from the approach by Hindustan Lever in his latest social responsibility strategy. The Unilever tries to create social responsibility values that go much beyond just reducing the organizations foot print (Mullerat, 2011). The Hindustan Unilever recognized that in preconceiving its market for the hygienic soap brand it could ensure that the diarrhea related deaths would be reduced (Asian Development Bank, 2009). The diarrhea killed about 5,000,000 children every year. The company launched Lifebuoy swastha chetana program a program by which the company hoped to promote hygiene and reduce the death caused by diarrhea. The program had a massive reach in India and was able to save many lives. The economic impact of the campaign was also enormous and the company was able to gain 14% market share (HUL, 2011). GE has been doing the same in the health care sector. One of the problems with the health care sector is that the medical instruments and the diagnostic equipments are too costly to afford by the rural and poor people. GE launched a program known as ‘healthymagination’ and committed to invest about $6 Billion (GE, 2009). Through this program the company has been developing medical products and diagnostic kits that cost much less than the traditional costs. For example the company has developed a portable ECG machine for the Indian market that costs 1/3 rd of traditional ECG machines. The company has also partnered with Embrace a social Ngo to develop an infant warmer (The Economic Times, 2011). Whereas the traditional infant incubators costs around $20,000 the embrace Infant warmer is priced at less than 1% of the traditional ones and does not need steady supply of electricity. Another example is the GE’s initiative that it took in 2005 which is also known as ‘Ecoimagination initiative’. As part of this initiative GE renewed its commitments to invest in sustainable products and services that enable the company to meet environment challenges. By the end of 2012 GE has reduced greenhouse gas emissions by 32% through this initiative starting from the base year (GE, 2012). Additionally the strategy has been economically beneficial for the company and the company has been able to raise about US $ 24 billion from these products. The corporate social responsibility of the Tata group is focused on mainly four pillars that are Philanthropy, Emergency approach, Specific community initiatives and Quality management practices (Aspen Business group, 2010). There are a variety of programs that have developed organically over the years supporting these four pillars in order to create an internal structure that is required to execute the organization’s sustainability plans. However the sustainability effort that is taken up by the Tata group is difficult to measure and so the economic benefits that are derived from the benefits of the CSR activities are difficult to understand the Return on Investment that is derived from the project is obscured and this can make it difficult to secure funding for future CSR incentives for the company. In contrast to the above policy by the Tata group The sustainability policy by Unilever focuses on 6 pillars The six pillars are General partnership, Connecting with consumers, Advocacy, disaster and emergency relief, Local program support and employee engagement (Unilever foundation, 2013). It is important to note that the mission of the Unilever foundation is to help the society and impact in a broad way by taking care of areas such as Hygiene, Sanitation, Clean drinking water, basic nutrition and self esteem. It is important to note that the sustainability initiatives that are taken up by the company do not focus on reducing the foot print left behind by the organization. Rather the sustainability efforts focus on solving global problems (Mullerat, 2010). This is the reason that the company has forged partnerships with leading world bodies and organizations. Figure 1 Source (Unilever, 2013a) GE’s policy on the other hand has focused on three main headings that are people planet and economy (GE, 2013). The main focus of GE has been on people and they find that people is the centre to all their activities, on strategic sectors for the company to create value for the future to continue inventing (GE, 2012a). Figure 2 SOURCE (GE, 2013a) Figure 3 Source (GE, 2013a) Figure 4 source (GE., 2013a) Conclusion After comparison of the sustainability reporting and the sustainable practices of the three companies it is clear that the sustainability reporting of the Unilever and GE is much different from that of the Tata group. Whereas the Sustainable practices of the Unilever and GE focuses on large worldwide issues the efforts by Tata group focuses on local foot prints and does not make the social responsibility ventures economic for the company which is not so for Unilever and GE. References Asian Development Bank, (2009). 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Corporate Social Responsibility and International Development: Is Business the Solution?. London: Earthscan. HUL., (2011). HUL- Leading Responsible Growth. Retrieved from: http://www.hul.co.in/mediacentre/pressreleases/2011/hul-leading-responsible-growth-press-release.aspx Kotler, P., and Lee, N., (2011). Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause. NJ: John Wiley & Sons. Mullerat, R. (2010). International Corporate Social Responsibility: The Role of Corporations in the Economic Order of the 21st Century. Bredfordshire: Kluwer Law International. Mullerat, R., (2011). Corporate Social Responsibility: The Corporate Governance of the 21st Century. NY: Kluwer Law International. Schwartz, M. S. (2011). Corporate Social Responsibility: An Ethical Approach. Ontario: Broadview Press. The Economic Times, (2011). GE Health-Embrace to distribute infant warmer in early. Retrieved from http://articles.economictimes.indiatimes.com/2010-12-17/news/27625585_1_infant-mortality-pouch-babies Unilever Foundation, (2013). Building better lives for a sustainable future unilever foundation. Retrieved from: http://www.unilever.com/images/slp_Unilever-Foundation-2013-Update_Sep2013_tcm13-371822.pdf Unilever., (2013a). Unilever sustainable living plan 2013. Retrieved from: http://www.unilever.com/images/slp_Unilever-Sustainable-Living-Plan-2013_tcm13-388693.pdf Read More