THE TATA WAYEvolving and Executing Sustainable

Business Strategies

Submitted by: Group 10

Amanpreet Singh 12P123Anand Kansal 12P126Anisha Bansal 12P128Mayur Srivastav 12P151Pratik Nagori 12P155Rohan Khandelwal 12P164

Growing Importance of CSR in Businesses Worldwide

•Sustainability 360•Moving beyond reducing environmental footprint•Engaging associates, suppliers, communities, consumers

Walmart•Greening its supply chains•Promoting fair-trade coffee and sustainable fisheries

McDonald’s

•Developed trans fat-free soyabean•Works with farmers to mitigate agriculture’s impact on

environment

Monsanto

“Today’s companies ought to invest in corporate social responsibility as part of their business strategy to become more

competitive” – Porter & Kramer

•ISO 14000 Environmental Management Standard•Global Reporting Initiative’s Sustainability Reporting Guidelines•Social Accountability International’s SA8000 code of conduct

Guidelines to disseminate best CSR practices

Offers an affordable transportation solution with a low carbon footprint

For Tata Motors, the Nano is much more than a new transportation choice of Indian people

Embodiment of Tata’s century of trust and cooperation with local communities

One of the fruits of Tata companies’ commitment to surfacing the best of business in the service of people, in India and globally

Tata Nano

Tata Consultancy Services(TCS)

Winning global accolades from Business in the Community’s (BitC) Corporate Responsibility Index (CRI), the leading UK benchmark of responsible business practices

Achieved gold band for its performance in the Community Index with a score of 94.7 percent

Computer based Functional Literacy Project which helped illiterate adults learn how to read in their own spoken language in a span of 30 to 45 hours spread over 10 to 12 weeks

Commonalities between Tata Motors and TCS

Both companies strive to share the human touch everyday and everywhere they go

The social and environmental created helps strengthen and promote the Tata brand

Leverage core operational impact to make a lasting impression on the communities in which they operate

This deep awareness of how business can benefit multiple stakeholders by mission and design constantly renews the Tata corporate identity

Principles behind TATA

2 main ideals or principles guiding the Tata way:

• Every employee, from CEO to the most recent intern share in the deep values of their leaders. Everyone supports and follows the values inherent to Tata

• Tata companies have evolved a collective commitment to evolving stronger connection between their values and first-in-class business practices. The social values and business endeavours are closely aligned (example: Tata Nano)

“In a free enterprise, the community is not just another stakeholder in business, but is in fact the very purpose of its existence.” – Jamsetji N. Tata

(Founder, TATA Group)

The TATA Index

• Since early 1990s, TATA group had endeavored to align its social and environmental values with business excellence

• Tata index for sustainable human development was initiated by Tata Council for Community Initiatives (TCCI) in collaboration with United Nations Development Program in India in 2001

• It was an effort aimed at directing, measuring and enhancing TATA’s community work as part of their social responsibility efforts

• Purpose behind the Index was to seed new benchmarks and motivate continuous innovation in sustainability across each company’s operations

• Deployed to assure continuous improvement in the delivery of social responsibility initiatives at the company level

How does the Index work• The Index breaks down sustainability responses into 3 nested levels

– Systems (275/1000) - involves leadership commitment, structure and deployment, strategy, review, etc

– People (175/1000) - measures parameters such as selection of personnel, training and volunteering

– Program (550/1000) - factors ranging from social concerns and scope for self-reliance and sustenance to knowledge transfer and good governance

• This makes areas for improvement very easy to identify and measure• Within each team, a Corporate Head Social Resonsibility (Always a senior

executive) manages a CSR team with specific responsibilities for community development, environmental management and volunteering

How TATA Index leads to improvement in CSR efforts

• For each assessment, the Corporate Sustainability Facilitator representing a Tata company and the Community Head for the project would also identify specific opportunities for improvement– For example, “The Company trains its facilitators/project leaders for leadership.

However, it is not clear how the training imparted is actually benefitting them”

• This leads to continuous evaluation of CSR efforts and thus newer and newer ways of improving upon them emerge

• Each project leader is responsible for understanding the specific concerns of each community, defining the key beneficiaries, and placing a clear focus on how a company’s core capabilities would contribute to a specific need

• The project leader will also determine the human excellence indicators and clearly identify which aspects have clear sustainability payoffs for the community engaged

Initial Results of the TATA Index

• Reporting companies averaged almost half of its intended goal (452.95 points on a 1000 point scale)

• TATA Steel was one of the highest scorers with 712 points

In 2005

• TCS scored 490• TATA Motors with 663 points

became one of the best performers in corporate sustainability within the group

In 2006/07

Why do Tata companies care so much?

Employees are trusted to approach their tasks and their volunteering with society in mind

They do not do something because it pays

They do because it matters- to their business model, to their own development as leaders, and to the legacy their company wants to leave behindPart of forging a strong connection between sustainability and competitiveness

Such orientation can trigger disruptive innovations

Leveraging its learning Sharing the idea of

indexation and the more practical how-to’s of the

Index with Tata suppliers, collaborators and

competitors within India through CII, Global

Reporting Initiative and Social Accountability

Initiative

The systematic approach of

indexation can be adapted to work

for different corporate identities

Index provides a guiding approach

to getting your systems, people and programs

better every step of the way

Tata’s Two-fold approach to develop Leaders for Corporate Sustainability

FIRST APPROACH• Index encourages a proactive application of Tata Business Excellence Model

in ways that promote positive social and environmental contributions• Annual scoring ensures constant process improvement• Assessment triggers company wide workouts that help strategic leaders

work with their internal teams to jointly identify major risks, opportunities and innovations

• Leaders use this to formulate a 3-5 year corporate sustainability strategy for organization

• This gives company a more sustainable edge• It widens their leadership bandwidth to make a larger difference in their

community and competitive context by setting new standards of what business can achieve

Two-fold approach (Cont.)

SECOND APPROACH• Corporate Sustainability Leadership profile guides their personality

footprints to trigger a virtuous cycle of enhanced goodwill and reputation

• Leaders assume responsibility for themselves and their leadership team, and work personally to tighten convergence between the trained corporate sustainability facilitators and their unit’s business excellence goals

• They lead for sustainability by example• Their performance on corporate sustainability is reviewed periodically• There is a flowchart showing how any organizations can systematically

implement leadership for sustainability

Process of Leadership Development

Leadership Protocol

• Leadership Protocol translates the group mission statement into executable leadership for sustainability

• The Index assesses and guides sustainability-enhancing processes• The leadership profile articulates the steps for strengthening

leadership capabilities• By embedding a society-minded logic to value creation, Tata have

given back many-fold to society• This learning has strengthened their corporate identity, and

encouraged bold steps in rethinking transportation, information technology or steel manufacturing

Adopting the Tata way

• Tata’s approach is simple, but not easy• Taking a comprehensive approach helps identify and configure

the various capabilities needed to create value sustainability- in systems, people and programs

• Lead others by example– Take a holistic view of value creation– Demonstrate unusual creativity in solving tough problems for society.– Practice strong ethical leadership with a deep sense of human

purpose.– Recalibrate the connection between your inner self and your

footprints