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Changing landscape in csr


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Changing landscape in csr

  1. 1. Changing Landscape in CSR – ChinaMNCs vs Indian TATAThe Chinese MNCs have seen CSR as a mandatory exercise rather than a sustainability program forlong term. On the other hand, TATAs have believed that it is responsibility to contribute to thesociety from which they grew big. The consequences of these contrasting approaches are evidentfrom both the cases. While MNCs in China have struggled for their mere existence, TATAs grew intomost respectable business house in India.The two cases can be analysed in a little more detail with relevant facts as follows. MNCs in Chinaflourished for quite long time by doing business with a capitalist thinking. They never thought thatCSR can help them strategically for long term sustainability. They felt that if they adopt globalstandards it is sufficient enough. But the greater caveat in this narrow eyed approach is that societyconstantly watches an organisation’s CSR. Since any organization derives its main stakeholder – thecustomer from the society, the society’s perceptions about the organization should matter a lot tothe organization.This caveat didn’t appear until the Sichuan Earthquake. Chinese MNCs have till then contributedsome petty amount that was mandated by their CSR regulations. The Chinese society didn’t bothermuch. But when the need of the hour arises, they expected these companies to contributesubstantially. That is when the mindset problem of these companies got exposed. They faced thewrath of boycott from the Chinese which resulted in serious disaster for the organization. It’s notthat all organizations had to face the same fate; the ones that were seriously committed to disasterwere received equally well and rewarded. The example of Wang Lao Ji, an herbal tea maker, can betaken for this case. People not only praised their response to help earthquake victims positively, butalso started becoming loyal customers to this organization. Their sales skyrocketed with shelvesrunning out of stock. So that shows how important is a society oriented mindset for an organization.TATAs have realized that this mindset is fundamentally important much earlier. They continuouslytried to innovate processes that orient their entire organization’s thinking towards the society. TheTCCI is a marvellous illustration of their commitment. The result of development of such culture inthe organization led to disruptive innovations like Nano and Functional Literacy Project of TCS. Allthis has made TATAs the most respectable organization in the Indian society. The result is TATAsearned many loyal customers and shareholders.To draw an analogy of both the cases, when Mumbai terrorist attacks happened at Taj hotel, thestaff did not run away for their lives. They bravely tried to save the refugees. Instead of tarnishingthe image of the hotel after such an attack, this built up their reputation. This is possible TATAscontinuously strived to orient their organizations towards society and that is where Chinese MNCsfailed.To conclude, it pays for an organization to be socially responsible consistently rather than adoptingto a regulation.Submitted by,Santosh Garbham