7/29/2019 Changing Lands

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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 organisations CSR. Since any organization derives its main stakeholder the

customer from the society, the societys perceptions about the organization should matter a lot to

the organization.

This caveat didnt appear until the Sichuan Earthquake. Chinese MNCs have till then contributed

some petty amount that was mandated by their CSR regulations. The Chinese society didnt 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. Its 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 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 continuously

tried to innovate processes that orient their entire organizations 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 tarnishingthe 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