Tata – Heart of Gold or Steel?

Featured in India’s Business Today is Tata Steel, a company that outperforms other steel players and is not only known for its management acumen, but also its long history of philanthropy. Despite charges last year from the Bhopal disaster survivors that the Tata group of companies has a dismal environmental record due to a complicated deal with Union Carbide (the pesticide factory that leaked poisonous gas), the Business Today article touts Tata Steel’s CSR initiatives as integral to its operations. A boxed section in the article states:

The goal of the CSR team is to empower people and focus their healthcare and hygiene in Jharkhand, Orissa and Chhattisgarh, where the company has operations or is planning to set up new plans. Apart from building parks, laying pipelines and other civic amenities, the company has undertaken environmental and ecological initiatives to bring down carbon emission and save energy.

Tata Steel’s corporate sustainability website provides a detailed account of its activities, including environment management.

What happens when a company works in part for social innovation, but at the same time, some of its corporate dealings stand against these aims? CSR can ultimately equate only to branding strategies, or in some truly innovative cases, also work hand in hand with the company’s profit-driven objectives. Is this steel behemoth a model or a mask for corporate social responsibility in the Indian setting?

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3 Responses

  1. Hi Shital,

    Pretty good insights into the real motives of CSR initiatives of the corporates. No doubt CSR is another form of “emotional branding” or a way of buying some space in the prospects mind to say that “we care” . Milton Friedman in his famous 1970 article says “The Social Responsibility of Business Is to Increase Its Profits.” Maybe not, Maybe yes. But for TATA i feel they have a good history of CSR behind them, i don’t think few incidents can overshadow the amount of social good they have been doing from 100 years or so.

    Regards,

    Suhel Khan
    YASH Technologies,
    Indore

  2. Hi Suhel,

    Thanks for sharing your thoughts. I agree, TATA’s CSR policies are pretty robust, and the few incidents that suggest otherwise are just indicators that those policies can always be improved and implemented better.

    However, I’m not sure I agree with Mr Friedman! Increasing profits may only answer to one set of responsibilities, but as we see more widely now, businesses are opening themselves up to addressing a more holistic outlook of what their responsiblities really are (environmental and social, not just for their shareholders).

  3. Hi Shital,

    I agree with you. Mr Friedman is history and its good to know that organizations worldwide are understanding slowly yet steadily that it makes sense in looking beyond the myopic view of just there shareholder interest.

    Talking from the business perspective, organization in the west are actively engaging mouth of word publicity as an important checkpoint in there branding initiatives.They know well that bad news travel faster than the good one. And it is the result of this lesson that they have started engaging themselves in social initiatives, to at least look good for the press.

    But i wont comment on the motives here, as far it benefits our ecosystem (social, environment etc) and set some good examples for others to follow.

    Cheers!!

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