International Business & Sustainability

8/7/2019 International Business & Sustainability

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G R O U P M E M B E R S :

A I S W A R Y A L A K S H M I

S A A C H I S H A R D A

T A TH A GA T HA S EN G UP TA

V . S . S R E E S A N T H

International Business &Sustainability

Date : 18 March 2011

Management of International Relationships


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International Business & Sustainability

Definitions for Sustainability:

Meeting the needs of the present without compromising the abilityof future generations to meet their own needs : Brundland

In International Business Context:

sustainable development means adopting business strategies andactivities that meet the needs of the enterprise and its stakeholderstoday while protecting, sustaining and enhancing the human andnatural resources that will be needed in the future. : David (1998)

Business sustainability is often defined as managing the triplebottom line - a process by which firms manage their financial, socialand environmental risks, obligations and opportunities. : Financial

Times


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Business Sustainability: TBL Theory


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Sustainability Issues of TATA

y Tata in Singur, West Bengal, India


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Identification of the Issue

y The left government of West Bengal had givenaround 1000 acres of land in Singur to Tata Motorsfor the launch of Tata Nano(Indias cheapest Car)

y

Opposing party Trinamool congress launched aprotest on behalf of the farmers from Singur asthey claimed that the land given for congress wasagricultural land.

y 60 acres of 1000 acres of land being used to set upthe factory is barren, the rest are a combination offarm land(some for three crop cultivation),

wetland, temple site, Hindu cremation, etc.)


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Analysis of Threats in terms of Triple Bottom Line

Social Bottom Line:

y The land occupied up Tata displaced more than12000 farmers as it was their only source of livelihood

y

Compensation given was inadequate and no housingfacilities offered were delayed

y Protests in Singur with the local people trying toassault officials of the Tata group.


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Continued..

y Formation of krishijami Banchao committee(savefarmland committee) backed by trinamool congress andMamta Banerjee

y Political unrest-questions were raised between validity of

the deal and agreements between the company and thegovernment leading to cases in the Kolkata high court.

y Afew farmers who lost land committed suicide

y Difficult for big companies to setup base in Kolkata

y Tapasi Malik a 16 year old girl was gang raped and burntalive by the CPM- the police and the state governmentguards.


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Economic Bottom line

y Land losers of 400 hectares, numbering over 12000which includes co-shares, produce crops worth Rs 10

crore annually will be lost.Environmental Bottom line

y Fertile agricultural land being taken over forindustrialization.

y

Wasting fertile agricultural land.y This would ravage the land forever and the area

would turn out to be an ecological burden.


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Implications for the firm

y Acquisition of a different area

Eg- Tata had an early choice between the former land

y Proper study of the proposed business area in termsof its affects on the welfare of the society

Eg- Compulsion for a sustainable society

y Importance of Government Support on any massiveinvestment in the society

Eg- political unrest in Singur


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Sustainability Issues

Identification of the issue:Launching of Tata Nano:


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Overview on Tata Nano:

y Tata Motors commercially launched Nano on March23, 2009 with a starting price of Rs.115,000(GBP1620), cheaper than the Maruti 800, the nextcompetitor.

y Nano received media attention due to its targetedlow price.

y NANO is often means to small

y The car is expected to boost the Indian economy,

create entrepreneurial opportunities across India, aswell as expand the Indian car market by 65%.

y Described as an eco-friendly "people's car".


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Analysis of Threats in terms of Triple BottomLine

y Social Bottom line:

- Already overcrowded Indian Roads

- Narrows Road networks and streets causing

parking congestions

y Environmental Bottom line:

-NANO is having the lowest carbon emissions

at 101 gm/km. But there is an express concern over the

sheer number of potential Nano customers in India

- Existing concern over Petroleum Scarcity.


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Implications for the firm:

y Realizing the importance of social impactmeasurement while prioritizing initiatives

Eg: In terms of both positive and negative effects

y Belief on what they have achieved and matching it withwhat their objectives are.

Eg: Merits like Price factor, safety factor and size factor.

y Tata should know the Limits of SustainabilityApplication in Practice

Eg: Time-scale and plethora of sustainability


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Ratan Tatas MessageWe did not do any shortcuts. Nothing waseliminated that would interfere with safety

or pollution or reliability


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Tata: Sustainability Strategy 2020

Context:Globalization: increasing concerns over negative impacts on society andthe environment & demands for a more consolidated approach on creatingsolutions

Demanding solutions from national governments or non-profit

organizations and forumsEconomic Crisis: Issue of firms cutting down on CSR expenditure

Recent sustainability issues over the company

y Nurturing a better way of translating stakeholder value into shareholder

valuey Vision - envisions a future in which it is recognized as the undeniable

global leader in corporate sustainability

y Focus - Tata gains a competitive advantage in forcing other companies tomeet and adhere to standards


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Sustainability Strategy 2020 (contd)

Proposed Implementation Strategy:1. Demonstrated global commitment to sustainability

2. Reinforce message that sustainability is key of business

3. Allows groups to make strategic investments regionally

4. Instills standardized measurement and reporting to define social impact

5. Build relationships with the society

6. Signals value to shareholders and stockholders.

Estimated impact of the Sustainability Strategy on TATA Group


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THANKS

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International Business & Sustainability

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