Corporate Social Responsibility Initiatives: TATA And Toyota Motors Corporation

Toyota Motor Corporation CSR Initiatives

What Is the Corporate Social Responsibility Initiatives?

It is a business practice adopted by organizations that want to make an impact to the community around instead of not only repatriating the profits to their headquarters. Through sound CSR practices, the organization enhances its image to different stakeholders such as the customers, employers, partners, shareholders and even the government (Salib et al., 2015). Often, clients tend to support more organizations that sacrifices for the sake of the community, since when the customer supports the business, at the back of their mind they know that they stand to benefit in future. Besides, investors are also likelier to be more inclined towards channeling resources to enterprises popular with high ethical standards (McWilliams, 2014). Different studies have revealed that most workers prefer working for organizations that they can make an impact, since the process of making an impact makes a happy employee, and as a result, there is a trickle down benefit to the entire supply chain of beneficiary to the company (Singh, 2016). These employees have realized that financial incentives is less important compared to making a difference in the society (Baumberg, 2014). The benefits of CSR initiative to the local community and the society in generally is already visible whereby it is today common to find companies giving donations to charities, employees volunteering in community-building non-profits , or even absorbing interns after their graduations. Such initiatives have already made a large impact to the society (Flammer, 2015).

There are several justifications as to why CSR are imperative towards company’s operations. To begin with, CSR initiatives ensure that corporate entities uphold high moral standards in its dealings with the environment and the community around. The organization is also mandated to maintain high ethical standards and requirements from its regulatory entities. Another justification is that the organization has a duty to uphold its reputation across the stakeholder’s gamut.

CSR does not only involve charity of philanthropic activities, but it may extend towards other causes such as energy saving programs and rebates for university students. However, most companies have different CSR policies whereby some have emerged successful while other have failed (Saeidi, 2015). No single entity has structured a CSR policy similar with its rivals. There are concerns that some entities have CSR policies in place that will benefit the community around in the long run but some companies only do it for publicity purposes (Hombert et al., 2015). It is in light of this fact that the paper will review CSR policies for TATA and Toyota Motors Corporation through a business value assessment report.

Company Background

Toyota is a leading automobile manufacture employing more than 300,000 people worldwide. The company was incorporated way back in 1940 in Japan and due to the adherence of its mission statement “making better cars” has made the company the de facto leader in terms of sales and revenues. In 2015, the company successfully sold 9.3 million units of vehicles, which is an increase of 15 percent compared to 2014 sales, despite the fact that the revenues reported were significantly affected by the exchange rate fluctuations from the Japanese Yen (Dobrzykowski, McFadden, Vonderembse, 2016). Since 2009 the company’s senior management has instituted massive changes to their operational processes. The changes were precipitate by the 2008/2009 global financial crisis (Przychodzen, Przychodzen, W. (2015). Some of the measures that have been instituted include the reorganization of Toyota’s operations into four distinct units and the extensive promotion of the “One-Toyota” concepts. As a result, the organization identified stability, efficiency and growth as three principal priorities in its overall financial strategy.

Toyota launched its global CSR program in March 2011. The initiative was dubbed the “Toyota Global Vision” represented by a tree like image. The company’s value is a mere representation of the tree, whereby Toyota’s stable business base is represented by the trunk. Toyota’s notions of “Always Better Cars” and “Enriching Lives” are represented as the drupe of the tree. Therefore the organization vision accentuates on the organizations principal objectives of profit maximization through the “Always Better Vehicles” and corporate social responsibility of “Enriching Lives of Communities”. This particular analogy is illustrated in the diagram below.

Annually Toyota releases its global responsibility report which detail the initiatives and CSR programs engaged through the organizations (Klingeberg, 2013). The table below is going to highlight the company’s 2016 report.

The company has been at the forefront of productive community engagement throughout its entire period of operations spanning six years back. The company’s CSR initiatives are in line with the organizations philosophy of giving back to the society that has continued nourishing the quality of individuals live across India.

The company’s community initiatives focus on four distinct areas: Environment, Employability, Education and Health. Besides, the company operates through the Affirmative Action Framework, and the company assists the company from scheduled castes and scheduled tribes to acquire access towards streamlined opportunities in education and livelihood improvement. TATA motors have embraced synergetic partnership with the government, civil society organizations and community members to undertake significant projects, that have helped developed a positive impact on the lives of individuals (Badhulri & Selarka, 2016).

CSR Initiatives

The company has embarked on initiatives that prevent and treat malnutrition. The organizations collaborate with kids up to six years, adolescents, pregnant women and lactating mothers. There are several health awareness sessions that are geared to community members to propel and curative measures. TATA motors are also at the forefront of providing safe drinking water whereby more than 16,000 people are already beneficiaries of the health program.

TATA motors is focusing on enhancing academic performance of secondary school kids through distribution of financial aid and conducting special coaching to the kids. The organization is also playing a role towards retention of the kids in school by making learning interesting through the use of audio-visual technology. Students are also encouraged to participate in co-curricular activities whereby the current efforts so far assisted so far more than 51,000 kids.

The unemployed youths are trained in different areas of automotive trades, mainly as drivers or mechanics. Immediately the people complete their training, they are absorbed in the Tata’s eco-system. In 2015, TATA motors provided training to more than 73,000 youths. Besides, the organizations also engage community-based groups of women and farmers to assist them earn supplementary income through agriculture and other associated programs.

TATA motors organize awareness sessions to assist with educating individuals on the importance of different aspects of the environment. The sessions have witnessed more than 13,000 participants, and through the green awareness, the organization has planted 67,000 trees on wastelands in attempt to enhance the green cover (Gupta & Sur, 2016; Bhardwaj & Agarwal, 2014).

These two companies are in the automobile industry. However, their headquarters are located in different companies and at the same time they have different business models despite operating from the same sector. Tata motors have their headquarters in India while Toyota’s headquarters are in Japan (Gayathri, 2016). The socio and macro-economic backgrounds of the country of operations of these two companies are different and therefore the social concerns of these countries must be different. From the case study, we can see that Toyota’s CSR initiatives is focused mostly on making the world a better place through proper manufacturing of the vehicles and educating the drivers on sound on-road behavior practices (Chatterji & Palakshappa, 2016). Toyota has gone to an extent to provide the vehicle drivers with education pamphlets on how to ensure that they vehicle is always in roadworthy condition and the company is also educating kindergarten kids in Japan and high school learners in Japan. However, on the other hand, TATA motors is more concerned with community programs such as access to safe drinking water, improving enhancing education quality, healthcare and other social causes. The two cases indicate that despite the fact that TATA and Toyota are operating in the same sector, their business models are dissimilar. Besides, the products they manufacture are developed for different social statuses, and therefore their production facilities are also located in different manufacturing hubs, located in communities with different social classes. As a result, the CSR initiatives of these companies are completely different (Baha & Saha, 2016).

TATA Motor Corporation CSR

Conclusion

From the above cases we have seen how the two companies have structured their CSR policies. Even though the companies come from different countries with their operations structured differently. However, the organizations have done so much and the bottom line is that the two companies regardless of their socio-economic background are still giving back to the society in one way or another. However, the organizations should work in tandem with the community around and other stakeholders to develop sound strategies that assist the organizations to improve the livelihood of the community around.

References

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