Tata Power Company (tpc) Case Analysis

Tata Power Company (TPC), as one of the companies under Tata Group, has been conducting several activities to preserve the environment and ensure sustainability. The company has set up a “triple bottom line” for all its corporate social responsibility (CSR) activities. The company wants to ensure that CSR activities add economic value, protect the environment and benefit the communities such as education or health, which improves the community as a whole. Colonel Prakash Tewari has been hired as the leader of CSR activities. Despite the fact that TPC has received several awards for its social activities, the company is stuck with a dilemma on how to further facilitate and improve the CSR activities.

There are several Key stakeholders that will be affected by Tewari’s decision. One of the most important stakeholders would be all of the communities that are affected by the CSR activities. They are one of the key user because TPS’s operation will affect their living environment and therefore, the communities’ main objective is to make sure the company will provide them a safe and comfortable living environment so that they will be free from pollution. Another key stakeholder would be TPC’s shareholders and their customers. As investors of Tata Power Company, they want to make sure the company reasonably allocate their investment. They want to see the company have a sustainable prosperous future and make sure the board of directors fulfill their due diligence and represent their best interest.

Given current circumstances, Tewari has to make a decision on the structure of the CSR department. CSR is currently part of the operations of the company and therefore TPC does not have a separate department for CSR activities. However, the environment is always changing. The “key communities” various in terms of many aspects including income, living standard and level of aspiration which makes it difficult to conduct and assess CSR activities. Due to the increasing difficulties, I recommend the company set up their own CSR department so that all the activities is conducted in a well-organized and structured pattern. To do this, the CSR department should contain both internal and external members. The internal members have gained rich experience from previous practise and therefore they will be able to control the quality and further strengthen future CSR activities. The external member can bring more expertise and fresh ideas into the CSR activities. Besides, they can also help make sure the transparency of the department in terms of budgeting and cost allocation so that there will be no misappropriate of asset which harm the interest of shareholders. However, to make sure the department has clear mission and constantly serves TPC’s long term goals, the department should be controlled by internal employees. Another option that Tewari is considering is whether they should get involved with a PBO/NGO.  The advantage is that the CSR department can have assist from specialized organization and personnel to enrich their human resource. On the other hand, cooperating with PBO/NGO will help the company gain trust among public which will improve the corporate image. However, there are also disadvantages. Working with PBO/NGO will make the decision process more complicated. Also, there will be a conflict of interest due to the fact that TPC is a profit driven business whereas PBO and NGO are non-for-profit organizations. My recommendation is that the CSR department should have full control over the activities towards the end. PBO/NGO can get involved in the end in terms of assessing the impact of CSR activities on the community. As an unbiased party, they are able to give subjective feedback and provide valuable suggestions to further improve CSR activities.

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