Tata pioneered the notion of employee benefits in India. It introduced the eight hour working day in 1912- an astonishing thirty –six years before the Indian government!
Maternity benefits, schooling facilities and leave with pay are a few examples of the benefits provided by the Tata Group years before it became law to do so. [5]
My personal opinion formed from the above mentioned facts on the Tata Group is that good ethical practices has been part of the groups philosophy from the start. It has been founded on ethical principles.
Purpose:
The main purpose of the group is to improve the quality of life of the community. This is done through leadership in sectors of national economic significance. [6]
Core Values:
The Tata Group companies share a set of five core values: integrity, understanding, excellence, unity and responsibility. These values drive the business decisions of the group.
The adherence to business ethics and commitment to social responsibility has earned the Group the trust of shareholders in a measure few business houses anywhere in the world can match.
[6]
Tata Business Excellence Model (TBEM):
The quality movement in the Tata Group is defined by a framework known as the TBEM, which has been introduced across the Tata Group as a means of increasing efficiency and business processes. These business processes relate to two factors:
- Business excellence and
- Business ethics. [7]
The Tata Code of Conduct:
The name Tata has always been synonymous with trust. The statement of purpose of the Tata Group explicitly seeks to improve the quality of life in the communities they serve. It says” our heritage of returning to society what we earn evokes trust among consumers, employees, shareholders and the community. This heritage will be continuously enriched by formalizing the high standards of behavior expected from employees and companies”.
The values and principles that govern the community were articulated for the first time in 1998. The company formally published its ‘Code of Conduct.’
It is a set of principles based on good ethical business practices by which all employees are expected to act. Signing of the Tata code of conduct entitles a company to use the Tata brand name.
Awareness programmes were organized were organized for persons other than the employees who also deal with the company such as the shareholders, suppliers etc…
It was felt that top management is likely to be faced by more temptations to violate the code of conduct due to greater level of authority and responsibilities. Hence, workshops for the family of the top management were organized to bring a sense of pride that they were part of an ‘ethical value based’ organization. [1]
Impact of ethical behavior on an organization and at an individual level:
Research shows that there is a positive relationship between ethical behavior leadership. An unethical organization at a societal level gives an organization a negative image. Unethical behavior leads to great loses, scandals etc…
Enron is an example of an unethical organization. Unethical practices have adversely affected the organization to such an extent that it ceases to exist. At an individual level the management responsible for the unethical practices may never hold high-level positions again due to the negative media coverage. [2]
On the other hand the trading firm Tata and sons that began in1867 approximately was a modest beginning for a brand that is valued in billions of dollars today.
It is clear from the above mentioned examples of business practices that for long-term profitability and sustainability ethical business practices is the way forward. Unethical business practices do bring about large gains unrealistic gains but cease to continue in the long term.
Mahatma Gandhi called business in the absence of morality a sin.
[2] [8]
Contribution towards environmental sustainability:
The Tata Group has always worked hard to make sensible and responsible decisions on environmental matters.
Tata Steel was the first integrated iron and steel plant in India to be certified with the ISO 14001 Environmental Standard Act. At that time Tata was one of the few worldwide to have this accredit ion. Clause eight of the Tata Code of Conduct states:
‘ A Tata comapny shall strive to provide a safe and healthy working environment and comply in the conduct of it’s business affaires, with all regulations regarding the preservation of the environment of the territory it operates in.
A Tata company shall be committed to prevent wasteful use of natural resources and minimize any hazardous impact of development, production, use and disposal of any of it’s products and services on the ecological environment.’ [9] [5]
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Group Environment Network:
It acts as a guide to companies under the Tata brand name on environmental issues. Its objectives are as follows:
- To develop a common approach on environmental issues and bring about an enhanced brand image along with sustained growth.
- To include environmental concerns in the Tata Business Excellence Model and the Tata Code of Conduct.
- To increase environmental awareness through workshops and case studies. [9]
Tata Steel has its own Environmental Management System (EMS). It aims at enhancing production of steel along with a hundred percent recycling of hazardous waste. [5]
Commitment to Environmental and Ecological Issues:
Organizations today are faced with the challenge of balancing the imperatives of creating jobs and selling products and services as well as the absolute necessity of protecting and regenerating of what remains of the natural environment is an on going challenge.
Tata’s endeavors include:
- Conservation of plant and animal species
- Improvement of the use of land and water and
- Protection of forests and green sanctuaries.
No policy can operate in isolation thus there is a need to link processes and people in a manner that benefits both nature and those who depend on it.
It requires total commitment to the idea of environmental conservation rather than profiteering.
The Tata Group has a long history of such commitment. The Tata ethos emphasizes on environmental and ecological issues.
“Environment is a focus area within our overall corporate social responsibility matrix.” Says Kishor Chankar, the chairman of the Tata Council for community Initiatives.
Tata companies adhere to environmental procedures drawn by Global Reporting Initiative (GRI) which operates under the regulations of the United Nations.
The group’s contribution to conserve the environment falls into two categories:
- Efforts of different Tata companies to preserve the environment.
- The Trust which supports a diverse cluster of non-governmental organizations [10]
Social Departments and Societies:
Tata Steel has established several social departments and societies working towards objectives other than profit maximization. These social departments are as follows: [5]
Implementation of HIV/AIDS programme:
Tata Steel’s proactive approach has resulted in the spread of AIDS being capped at 1% of the population in Jamshedpur in comparison with the national average of nine percent
The effectiveness of a socially responsible programme like that of Tata Steel depends on the commitment of the organization and the involvement of its top management. The company in this case has both in abundance.
The Global Business Coalition has been set up to check the spread of HIV/AIDS in the world to which Tata is a signatory. It believes the business communities have the necessary communication and marketing skills, logistics and distribution infrastructure to check the spread of the disease. The Tata Group was awarded for the GBC award for the best initiative in AIDS awareness
Tata Tea Limited is the largest integrated tea company in the world with significant presence in over 35 countries.
Tata Tea has decided to implement an HIV/AIDS program.
Purpose:
- To reduce the spread of HIV/AIDS or STI in the workforce and local communities
- To provide treatment and care for those who have HIV and to reduce the impact of HIV/AIDS.
Program Description:
The program relies heavily on education, prevention and awareness.
Prior to the implementation of the HIV/AIDS program an informal policy had been implemented.
Policy:
The policy can be characterized by the following principles.
Employees will not be discriminated on the grounds of HIV/AIDS neither will they be tested for HIV/AIDS at the time for recruitment.
- Confidentiality and disclosure:
Disclosure of status is not required. It is to be disclosed only with the consent of the concerned person and in writing.
Benefit packages do not discriminate by HIV status. All tea estate workers and dependants have free access to company health programmes including voluntary counseling and testing.
The medical officer of the tea estate evaluates when an employee is deemed medically incapacitated. The employee has the right to appeal in the decision.
Prevention and Awareness:
- Increasing shareholder awareness:
- Peer Educators: the tea estates were organized into family units consisting of families called ‘lines’.
- Each line was designated ‘line worker’ who is trained as a peer counselor. Peer educators are gender balanced with 44% male and 56% female.
- Outreach to high risk populations: Peer educators and specially trained commercial sex workers and day care attendants conduction both one to one outreach as well as group presentations to engage high risk populations.
- Condoms: condoms have been available at workplace dispensers since 2000. Condoms were distributed through workplace dispensers and peer educators.
Voluntary Counseling and Testing:
It is offered free of charge to everyone in the community. It is offered at two locations namely tea estates and general hospitals. At each of these locations there is a medical practitioner and a counselor trained in HIV risk reduction counseling.
Key Success Factors:
The success factors can be summed up as follows:
- Creating funding arrangements to attract private sector investment.
- Tata was unable to receive external funding, so it formed a separate implementing non-governmental organization (NGO) called ISM-IMA which was able to attract contributions from Tata and well as other parties for example The Asian Business Coalition on HIV/AIDS
- Conducting an in depth local need assessment
- Consistent focus on involving management
- Use of a well balanced team of male and female peer educators
Future Goals:
- To standardize the various workplace interventions on HIV/AIDS within the five top companies within the Tata Group
- To start an Indian Business Council of AIDS [11] [12]
Conclusion:
An analysis of CSR and Tata’s contribution:
Often civil society advocates of corporate social responsibility (CSR) accuse large organizations such as Tata of only providing lip service to the idea of business ethics and corporate citizenship.
The main reason for such accusations is that when commercial interest and social responsiveness come into conflict the former takes first preference.
Having analyzed Tata’ actions from the corporate social responsiveness point of view I strongly feel it’s often a “win-win” for most organizations such as Tata.
CSR may be an innovative way of marketing an organization but from the Utilitarian perspective it provides the greatest good for the greatest number of people. Moreover, no one party is being harmed. Having done so much for society it’s only human to want recognition for the same.
An organization is not solely run by a proprietor or a group of shareholders. Neither is it run by the board of directors.
Organizations are run on systems and policies. Successful organizations have well established ethical policies. Ethical business practices bring about a great deal of trust in the minds all those who interact with the organization.
In the absence of trust it is almost impossible to run a business. Managerial decisions and day to day activities should be based on ethical principles and managed by a responsible management team.
References:
- Maheshwari, S (2004) Ethics in organizations: The case of Tata Steel.
1sunilm.pdf
- Lussier, R (2004) Management fundamentals, concepts, applications and skill development.
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The Tata group profile available on
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The Tata website, ‘beyond business’ section,
- Mahajan, A (2003) Enhancing business-community relations: Tata Steel case study.
www.worldvolunteerweb.org/fileadmin/docs/old/pdf/2003/031201_EBCR_IND_tata.pdf
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The Tata website, ‘leadership with trust’ section
- The Tata website, ’soaring to conquer’ section
8. The Tata website, ’a brand apart’ section
9. The Tata website, ‘the Tata Group and the enviroment’ section
10. The Tata website, ‘the Tata Group nurturing nature’
11. The Tata website, ‘the Tata Group in good company’ section
12. World Economic Forum, private sector intervention. Case example