1. Changing Landscape in CSR – China
MNCs vs Indian TATA
The Chinese MNCs have seen CSR as a mandatory exercise rather than a sustainability program for
long term. On the other hand, TATAs have believed that it is responsibility to contribute to the
society from which they grew big. The consequences of these contrasting approaches are evident
from both the cases. While MNCs in China have struggled for their mere existence, TATAs grew into
most respectable business house in India.
The two cases can be analysed in a little more detail with relevant facts as follows. MNCs in China
flourished for quite long time by doing business with a capitalist thinking. They never thought that
CSR can help them strategically for long term sustainability. They felt that if they adopt global
standards it is sufficient enough. But the greater caveat in this narrow eyed approach is that society
constantly watches an organisation’s CSR. Since any organization derives its main stakeholder – the
customer from the society, the society’s perceptions about the organization should matter a lot to
the organization.
This caveat didn’t appear until the Sichuan Earthquake. Chinese MNCs have till then contributed
some petty amount that was mandated by their CSR regulations. The Chinese society didn’t bother
much. But when the need of the hour arises, they expected these companies to contribute
substantially. That is when the mindset problem of these companies got exposed. They faced the
wrath of boycott from the Chinese which resulted in serious disaster for the organization. It’s not
that all organizations had to face the same fate; the ones that were seriously committed to disaster
were received equally well and rewarded. The example of Wang Lao Ji, an herbal tea maker, can be
taken for this case. People not only praised their response to help earthquake victims positively, but
also started becoming loyal customers to this organization. Their sales skyrocketed with shelves
running 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 continuously
tried to innovate processes that orient their entire organization’s thinking towards the society. The
TCCI is a marvellous illustration of their commitment. The result of development of such culture in
the organization led to disruptive innovations like Nano and Functional Literacy Project of TCS. All
this has made TATAs the most respectable organization in the Indian society. The result is TATAs
earned many loyal customers and shareholders.
To draw an analogy of both the cases, when Mumbai terrorist attacks happened at Taj hotel, the
staff did not run away for their lives. They bravely tried to save the refugees. Instead of tarnishing
the image of the hotel after such an attack, this built up their reputation. This is possible TATAs
continuously strived to orient their organizations towards society and that is where Chinese MNCs
failed.
To conclude, it pays for an organization to be socially responsible consistently rather than adopting
to a regulation.
Submitted by,
Santosh Garbham