Tata Motors' Environment-Friendliness - Case Study Example

Tata Motors (India) Tata Motors is a multinational car manufacturing company based in India. The company was established in 1945 by the famous business family of India “Tata Group”. It is India’s largest company in the automobile and commercial vehicle sector and was ranked as the 19th largest automaker by OICA in 2007. It ranks fourth in world’s largest truck maker and is the world’s second largest bus manufacturer. Tata motors acquired Jaguar Land Rover business from Ford Motor Company in 2008. It is the first company from Indian engineering sector which is listed in New York Stock Exchange. It has a workforce of 22,000 employees from India and abroad. It has recently launched a new car, Tata Nano, which is considered to be the world’s cheapest car. Tata Motors has auto manufacturing and assembly plants both in India and in other parts of the world. I chose this company primarily because of its country of origin, India, which ranks 8th among the world’s most polluted countries. India is a country with one of the highest population rate in the world and a large portion of the population is unaware of the hazards of environmental degradation. That is why many multinational companies have also exploited the country by putting up plants which cause pollution. Being one of the most reputed companies of India which is recognized globally, Tata Motors cannot not only promote sustainability within the organization, but can also encourage the government, local population and other local industries to become sustainable because of its reputation. In short, Tata Motors can be one of the pioneers of promoting sustainability and environment protection in India by implementing sustainability in the organization. The other reason why I chose an organization from the automotive industry is that motor vehicles of all types are considered among one of the basic needs of every person and at the same time they are also considered as one of the major causes of environmental pollution. Not only is the process of car production hazardous to the environment, but the product itself is also a source of pollution and as the life of an automobile is at least 5 years, so it affects the environment for a long period of time with long term results. Bringing sustainability in this sector can benefit the environment in the long term. There are broadly three main areas where sustainability can bring about an impact and can be beneficial to the company as well as the organization. These areas are as follows: 1. Environmental protection: Tata motors can provide its customers with ever safer and environment friendly vehicles by using alternative fuel technology to run the cars or other vehicles. The most common form of air pollution is the smoke which is released from the exhausts of the car due to the combustion of petrol of diesel which releases harmful gases such as carbon mono oxide. By doing extensive research and development in finding alternative methods of fuel, which is efficient and environment friendly, Tata Motors can move towards building a sustainable environment. Some of the alternate fuels to run the vehicles which have also been developed in some parts of the world are as follows: Electric car: An electric car is a type of alternative fuel car that uses electricity as a source of fuel rather than the traditional combustion engine. It is simply a rechargeable battery powered car. Electric car is the best alternative to petrol and diesel run cars. As crude oil, from which petrol and diesel is extracted, has limited resources and cannot be recycled, electric run cars can help in sustaining these resources and at the same provide, fulfill the requirements of the people. Moreover, electric cars do not release any harmful gases and is absolutely environment friendly. The batteries of the car can be charged by using electricity generated by hydro or wind power plant. Additional replacement can be made by using solar cells which can charge during day time and do not cause any pollution. Hybrid cars: Vehicles which utilize both electric motors (as in electric cars) and other types of engines are called hybrid cars. If at time, there is no source to charge the electric cells ( e.g no sunlight in the case of solar cells) the car can still be run using other fuel such as petrol. In this way, consumers do not need to completely rely on only electricity and get the flexibility to use other fuel in case one is not available. Advantages of using electric or hybrid cars: a) Fuel consumption: Hybrid cars are the best way of conserving fuel (petrol or diesel). By switching between electric method and fuel power, depending on the condition, consumers can minimize fuel consumption. Moreover, as hybrid electric vehicles have a greater fuel economy as compared to petroleum driven vehicles, by manufacturing cars based on electricity, Tata Motors can play a major role in fuel consumption and reduced vehicular air pollution worldwide. b) By using electric fuel which is free of harmful components, air pollution can be minimized due to lower fuel (petrol, diesel) consumption which can lead to improvement in human health with respect to respiratory and other illnesses. This can typically benefit the urban areas of India and other countries which are among the most polluted areas of the world. Tata Motors can gain significant advantage as far as sustainability is concerned if it shifts towards manufacturing cars which rely on electricity or solar power as an alternative to petroleum energy. 2. Economic Growth: The automotive industry in general is considered to be a major economic and industrial force worldwide providing employment, economic growth and foreign reserves due to international trade. Tata Motors can play a pivotal role in the economic development of India. Its development and growth will not only give direct employment to people of India, but will also enable smaller businesses such as spare parts, workshops etc to grow, hence, the development of Tata Motors can contribute not only at macro-economic level but also at micro-economic level. 3. Social equity: Tata Motors can create an internal environment which promotes workforce diversity. Working with a diverse workforce can bring competitive advantages to the company and would also help the company to have better relations with suppliers, customers and the community. India is a highly diverse country with people belonging to different religions and sects. Promoting workforce diversity in such a country can create harmony and peaceful environment not only in the company, but also at a national level. Having discussed all the opportunities Tata Motors can get and provide to the community by being sustainable, the main issue arises which is how to become sustainable. In order to get sustainability, the most important role in an organization is played by its human resources who are its employees and workforce. In order to achieve sustainability, the organizational design should be such that it encourages employees to do efforts to protect the environment, the organizational culture should promote what is known as “ecopreneurship”. The word ecopreneur is a portmanteau of “ecological” and “entrepreneur.” An ecopreneur is an individual who is focused on ecologically-friendly issues and causes, attempting to do business in a way which benefits the environment. He may not be a person or entity only involved in products like solar powered cells, water conservation system or compostable packaging. In fact, an ecopreneur is anyone who ranks environment more than or equally to profits as his most effective criteria as a business owner. The main aim of an ecopreneur is to build a firm which is more sustainable and environmentally friendly. “An entrepreneur whose business efforts are not only driven by profit, but also by a concern for the environment”. (Schuyler. 1998). The terms such as “Sustainopreneur”, “environmental Entrepreneur” and “eco capitalist” are synonymous with ecopreneur. The characteristics of ecopreneurs are: They all undertake business ventures which involves a measure of risk They must identify a feasible business opportunity Their activities must have a positive impact on the environment. The degree of intentionality separates ecopreneurs from accidental entrepreneurs. Ecopreneurs can utilize green issues as a competitive advantage for their enterprises on the basis of the four principles known as Natural Step principles. The guidelines in these principles are: 1. Energy and Resource Use Efficiency and Maximization: “In nature, one-way linear flows do not long survive. Nor, by extension, can they long survive in the human economy that is a part of the earths ecosystem. The challenge is to redesign the materials economy so that it is compatible with the ecosystem”. (Lester Brown. Earth Policy Institute). By minimizing waste production and maximizing reuse of waste streams, sustainable business can potentially significantly increase profits. 2. Ecosystem Services: Services related to protection of ecosystem and natural resources and preventing environmental degradation can be an inspiration for a green business idea for ecopreneurs. 3. Natural step principles: ecopreneurs can see potential risks, such as extinction of substances extracted from the Earth’s crust or overharvesting etc, as opportunities for success through green business. 4. Eco- efficiency and eco- effectiveness: ecopreneurs should find methods of decreasing waste while increasing productivity such that the waste of the production process and the product itself can be the raw materials of a new product of service. The term “Corporate Social Responsibility” or commonly known as CSR is used to denote to a business’s responsibility towards the society and environment. Many companies are now engaged in CSR activities By implementing ecopreneurial policies, Tata Motors can achieve both objectives, that is, generate profits to keep stockholders happy and at the same time achieve sustainability. For example, Tata Motors can save fuel costs by using energy efficient mechanisms which would ultimately result in more profits as the total cost would reduce. Moreover, the company can also gain popularity by adopting green businesses which would help in gathering a larger market share as consumers today are more attracted towards companies which are environmentally friendly. It can also gain competitive advantage if it finds niche in the green-industry and is able to become efficient by increasing the productivity. By exploiting these opportunities, Tata Motors can not only make profits but can also protect the environment and make it sustainable for the new generations. Sustainability development over the next several decades offers vast new business opportunities with value up to $6.2 trillion Companies who are proactive in their approach and want to survive in the long run can utilize these opportunities to generate large profits and at the same time build rapport for being environment friendly. Moreover, in today’s time, the awareness and the effort to protect the environment have increased to a great extent. People expect from the companies that they should not only be there to make profits, but must also serve the society and the environment because, after all, the society and the environment are the driving forces of any company. We have examples of many companies who have become very profitable by adopting the business models of ecopreneurs. Industries such as recycling plants, energy production by using waste materials, using byproducts for packaging and making new products etc have grown a lot in the recent years and still there are innumerable opportunities in the green- industry. By exploiting these opportunities, companies can not only make profits but can also protect the environment and make it sustainable for the new generations. References Volery, Thierry. (2006). Ecopreneurship: rationale, current issues and futures challenges. Schaper, Michael. (2002). The Essence of ecopreneurship. Greenleaf Publishing, reuters, . (2007). Beyond The Green Corporation . Business week. Retrieved (2010, April 12) from http://www.businessweek.com/magazine/content/07_05/b4019001.htm Shah, Anup. (2002). Corporations and the environment. Global issues, Retrieved from http://www.globalissues.org/article/55/corporations-and-the-environment Goliath, . (2002). A Framework for ecopreneurship: leading bioneers and environmental managers to ecopreneurship. Greener Management International, Retrieved from http://goliath.ecnext.com/coms2/gi_0199-1833508/A-framework-for-ecopreneurship-leading.html About Tata motors. (2010). SurfIndia, Retrieved from http://www.surfindia.com/automobile/tata-motors-ltd.html Avasere, Aditya. (2008). Sustainable development. Scribd, Retrieved from http://www.scribd.com/doc/12991676/Sustainability-in-Automobile-Industry Morin, Michael. (2010). Product sustainability in the automotive industry. Information press, Retrieved from http://www.informationpress.net/Environment/204-michael-morin.html Reuters, . (2010). Worlds ten most polluted countries. Crunkish, Retrieved from http://crunkish.com/top-10-pollution-causes/ Read More