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 shelves running 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 tarnishing the 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