Case Study Analysis On Tata Power 3u3c4q

Case Study Analysis on TATA POWER: CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINIBILITY

Submitted to: Submitted By: Prof. Supriti Mishra Aditya A. Dash

Ajeet S. Chauhan

Jubin Joseph

Tata Power History Tata Power is the largest & oldest integrated private power utility for India. The company originated in 1919 and was originally formed as the “Tata Hydroelectric Power Supply Company. The core product focus consists of electrical power, natural gas, electricity generation and distribution, natural gas exploration, and transportation. The company is highly driven by innovation and leading edge technology. This drive for innovation has led Tata Power to establish various public & private partnerships to aid in their focus of generation, transmission and distribution. Tata Power holds strong leadership qualities which increases the value of both their company, and the communities which they do business in. Vision: To be the most ired integrated Power & Energy Company delivering sustainable value to all stakeholders. Mission: We will become the most ired company delivering sustainable value by: • Providing world class power and energy solutions that exceed customer expectations • Innovating and deploying cutting edge eco-friendly technologies • Capitalizing on global opportunities and exploring synergy in entire value chain

• Empowering our employees and creating an environment for them to perform at their

highest potential • Caring for the safety, environment and well-being of employees and their communities • Ensuring profitable growth and enhancing value to stakeholders

Values: Integrity, Agility, Respect for People, Collaboration, Empowerment, Trust, Care, Excellence, Tata Power is also a company that believes strongly in corporate social responsibility. Their main areas of focus includes: Environmental, healthcare, education, and sustainable livelihood. In the environment, Tata Power has started environment awareness campaigns, helped to conserve water and other natural resources, to help better the environment. Their healthcare focus is mainly centered on AIDS awareness programs, and Immunization/Health checkup camps. Tata Power has built a strong culture throughout the company, as it pertains to social responsibility. (Thompson)

Q2. PART A-

The net worth of the company as of 2007-08 was Rs. 80,520 million out of which reported net profit was about Rs. 8700 million. At that time it was an unwritten rule in the corporate world was the CSR budget should be 2% of the net profit which was afterward mandated in the Companies Act. Therefore the CSR budget would have been 2% of Rs. 8700 million that equals to Rs. 174 million. But the proposed CSR budget was only about Rs. 50-70 million. That amount when compared was too less and under proportionate.

Activities

Percentage

Infrastructure

15.02

Health Care

7.22

Environment

8.23

Vocational Training

7.22

Income Generation

2.02

Drinking Water Scheme, Rural Electrification, Awareness

6.21

programs, sports tournaments

The above table give a brief idea in percentages about the CSR expenditures out of the budget. Some of the benefits which are tangible and intangible are as follows:

Tangibles: 

Development of structured, well planned, equipped town-ship



Availability of facilities (health, education, recreational, commercial, entertainment, agricultural/vocational )



Employable population

Intangibles: 

Eradication of illiteracy, poverty, mal-nourishment



Better connectivity [hence, development of socially aware, market driven, better adaptive community]



Good-will



Better relationship with stake-holders [communities, NGOs, environmentalists, government, and internal policies]

Cost Benefit Analysis:

Right now the costs are on the higher side because the company is at the asset building stage which will take time to reap the benefits from the assets. There are negative sentiments in the market about the company with ways of production of power with a huge skill-demand gap. The factors which are beyond control of the company are growing carbon foot-print which stems from over dependence on coal power, bargaining power of the NGO’s and lastly losing reliability on impact assessment technique.

PART B-

Different parameters on Impact Assesment: It should be different across borders, because: 1. Different Ecology, Human Development Index and Factors, Culture 2. Different Input factor-based production strategy 3. Even within border, different strategies for hydro, thermal & wind based energy production has been observed. 4. Tying-up with field-expert from NGO’s are also good conduit to ground realities, communities 5. Need for regular ratification of sustainability measures

Benchmarking can be done on the following parameters: 1. Indices like Dow Jones Sustainability Index 2. Varied Nature, scale of activities and target stake-holder 3. Region-based institutionalization may be a possibility, but not a global one