CSR and Competitive

Advantage
 Tata Steel
• Century of CSR
• It is a story of a company that is doing well because of , not inspite of ,its relation
with the community,.. in the past we were good in business ethics , but poor in
business process, acumen and marketing. we are trying to balance this inbalance
• Old tag line “ We also make steel”
• In 2002 new vision 2007 stated Tata stell will be a Net EVA positive company and
also and continue improve the life of the employee and the community we serve
• This raised contradictory challenge - How will you have reach the new emphasis
of shareholder return with Tata Steel historic focus on its community
 Tata Steel
• Tata Steel social orientation pre dates its foundation in the late 19th century
• J N Tata gave half his weath to IISc , Bangalore - Died in 1904 - inspite of warnings
that school will not get applications
• “our values at Tata Steel are well acknowledged,to the extent we take care of our
employees, our communities . We have a special culure here.Culture does not
come because of one leader or ovenight. This company had a series of leaders
that have had similar ethos”
• Tata policies attracted worker loyalty - They protested when GOI wanted to
nationalise Tata Steel
• When coal was nationlaised tata mine where not nationalised
• Their ethics attracted senior managers to tata steel
 Tata Steel
• We get a lot of mileage because our reputation
• Values work in India - i can rely on this pipe because it is from tata
• Some values in social context add value in business context - when
negotiaing we have able to bring down prices
• Even those attempted to bribe had a healthy respect for its adamacy
to operate within the tata code of ethics
• The indian public equated socially responsible business with tata steel
• Tata steel is trying to be socially responsible as well as be profitable
 CSR and Competitive Advantage
• Many CSR efforts are counter productive - it pits business against society when
they are inter depedent and think CSR in generic terms instead crafting them to
their individual strategies
• CSR can be much more than cost
• Approached strategically it generates
• Opportunity, Innovation and Competitive Advantage
• While solving social problems
• How to create strategic CSR
• You can create pioneering innovations and offerings that can create value for the
company as well as the society
• Toyoto - Concern about emission made them innovate Hybrid Engine Prias
 CSR and Competitive Advantage
• How can you create the link betwen CSR and Competitive advantage
• In what way your organisation affect society
• How does your society affect your competitiveness
• Select social issues to address
• Start small initiatives that can become large over time which is beneficial to
society and your company
• Government, social activists, and Media are holding companies to
account for the social consequences of their action
• Many organisations rank companies on their CSR
• So CSR has become an inescapable priority for CEOs
 CSR and Competitive Advantage
• Prevailing approaches to CSR are so fragmented and disconnected
from business and strategy so as to obscure many great opportunities
for the company to benfit the society
• If corporations can use the same frameworks they use for their
business core choices for CSR then they would discover that CSR is
more than a cost, constraint, or a charitable deed but a competitive
advantage , source of innovation and opportunity
• It is not a zero sum game - corporate success and social welfare
 CSR and Competitive Advantage
• Mapping social opportunities
• Rather than merely acting on well intentioned impuleses or reacting
to outside pressure, companies can set a affirmative CSR agenda that
produces maximum social benefits with business benefit
• Looking inside out- social impact of the value chain - this can be used
as a framework to map positive and negative social impact of those
activities
• Looking Outside in -Social influences on competitiveness -this requires
understanding the social dimensions of the company's competitive
context
 Prioritising Social Issues

Generic Social Issues
Social issues that are not
sigificantsly affected by companies
operations nor affects comapnys
long term competitiveness
Value Chain Social Impacts
Social activities significantly
affected by the company activities
in the ordinary course of business
Social Dimensions of Competitive
Context
Social issues in the external
environment that significantly
affect the underlying drivers of a
company's competitiveness, in the
locations where it operates
 Strategic CSR
Generic Social Impacts Value Chain Social Imapcts
Good Citizenship Mitigate ham from value chain
impacts
Transform value chain activities to
benefit society while reinforcing
Responsive CSR strategy
Social Dimensions of Competitive
Context
Strategic CSR that leverages
capababilities that improves
competition context
Strategic CSR
 CSR and Competitive Advantage
• Typically if you are able to tie a social issue to a company business
issue greater the opportunity to leverage the company resources and
benefit society