Problem Statement

To make a decision on the structure and composition of the CSR department

given the expansion plans of TATA Power.
External Analysis
Factor (Political, Economic, legal etc.)
Political:
The Indian power sector was
dominated by State and Central
Governments. They had 90% of
the total market share.

Implications on the problem

To expand its CSR activities TPC
required funds , which was a
percentage of its revenues. With
government dominating the
power sector it was difficult for
TPC to increase its contribution
towards CSR activities.

Social:
The people giving up their land
for
TATA
power
for
their
expansion activities are being
taken
care
of
the
CSR
department.
Some of the NGO/PBO grew over
a period of time, and their
phenomenal growth gave them a
hold over key communities.

Economic:
The demand for power in india
was enormous and private
players accounted for 10% of the
generation
capacity.
Peak
electricity
demand
was
estimated to be 152746 MW by
2011-12 and all the companies
were competing to win
the
market share.

CSR
activity
was
facing
challenges at rural front as there
was absence of basic skill sets in

The help provided by TPC via the

CSR activities helps instill the
confidence of the villagers on
the company. This will help in
the sustainable growth of the
company and will also help in
aligning of their vision .
In order for CSR activities
undertaken by TPC to succeed,
they needed support from NGOs.
If the bargaining power of these
organizations increased, it would
be difficult to carry out checks
and controls over them. Hence,
the activity would not be a
complete success without the
proper co-ordination between
the company and the NGO
TPC to tap the growing market
was planning to expand its
production scale to 10000MW
over the next 5 years. This
expansion required acquisition of
some of the existing players and
other resources such as land and
marines. Hence, the CSR
department of the company will
have to do more for those
people who are being displaced
from their present area of stay
due to the expansion of TPC.

the villagers , Also the markets

for their products were not
readily available.

Legal:

TPC was losing funds to train

the villagers in vocational skills
such as tailoring . Absence of
market for such products
hindered TPCs efforts to employ
the villagers. Hence, TPC should
look into other ways to make
their activities more meaningful.

This ensured that with the legal

consent of government and local
communities, both the
operational and CSR activities at
TPC were conducted in a smooth
manner.

It was a challenge for TPC to

minimize the environmental
hazards through effective CSR
activities.

As per the law ,companies

required licences to start the
production
operations
from
governments
and
local
communities

Environmental :
Power generation activities were
one of the major sources of
pollution and contributed to a
quarter of all carbon emissions
globally.

SWOT

Strengths:

TPCs CSR activities rust were

broadly divided into six thrust
areas . Such division helped TPC
to widen its scope.

TPC was awarded the Civic

award for social development in
recognition of its efforts.

Weakness

The impact assessment

mechanism was difficult to
implement. TPC was facing
challenges on institutionalising
the CSR activities across all the
departments.

TPC was branded as an alien

entity and its efforts were seen

TPC employed a triple bottom

line for any CSR activity which
helped to streamline the overall
process.

TPC was nations largest private

player in the energy sector .

TPC being a corporate house had

a
speedy
decision
making
process.

TPCs
CSR
activities
were
monitored by a specialised
council common to all TATA
group.

The MOU between TPC and PSI

ensured that the CSR activities
such
as
AIDS
awareness
program can be conducted in a
more effective manner. The
volunteers were responsible for
field activities that ensured that
they were thoroughly involved .

Appropriate
training
was
provided
to
volunteers
participating in AIDS awareness
campaign for crowd pulling
activities .

TPC was a pioneer in power

industry , it
was involved in
different
modes
of
power
generation through Thermal,
Hydro and Wind. Such versatility
gave
TPC
a
competitive
advantage over others.

TPC s association with REACHA

regarding energy conservation
activities.

Implementation
of
impact
assessment
mechanism
to

as tricks by the local

communities , such perception
made it difficult to integrate
them with TPCs CSR activities.

Creating Job opportunities for

villagers was a difficult task for
TPC as villagers lacked basic skill
set .

Villagers who were trained by

TPC had no market to sell their
products.

Difficulty in identifying key

communities.

study the quantitative and

qualitative efficacy of HIV/AIDS
awareness program.

Important parameters such as

Community satisfaction index
were used to assess the CSR
activities.

TPC s carbon emission standard

was better than the norms laid
down by NAAQS.

Opportunity

TPC was running its CSR

activities through volunteering
initiatives. Participation of
volunteers in such activities can
be improved through self
motivation.

Cultivation of a sense of
ownership among the local
communities can improve the
effectiveness of CSR initiatives.

TPC can contribute to ecological

balance by controlling its carbon
emission .

Better use of baseline data to

establish a protocol for future
projects and monitor its impact
on local ecology.

Threat

TPC has to integrate more

NGO/PBO to make its CSR
activities successful and it was
difficult to identify the NGOs
which would fit at every stage. A
wrong selection partner NGO
means failure of TPCs plan to
streamline CSR activities.

Difficult to cater all the villages

who were under TPC s CSR
program.

Failure to maintain the ecological

balance through controlling the
carbon emission was a threat to
TPCs cause.

The PBO at TPC might intervene

with the CSR activities and get
involved in non-productive
activities such as lobbying

Factors and Critical Factors

Factors

Motivational factors

Economic conditions

Profitability

Sustainability of corporate
strategy

Ecology/ Environmental factors

Community satisfaction index

Community development

Need for expansion

Effectiveness of various CSR

activities

Goodwill

Critical factors in order of their priority

for developing options

Motivational factors
Environmental factors
Sustainability of corporate
strategy
community development
Community satisfaction index
Need for Expansion

Analysis of the Critical Factors

1. Motivation The CSR activities at TPC required the volunteers to be
strongly motivated towards social causes. The motivation which TPC
sought was self motivation instead of extrinsic factors like monetary
rewards.
It also favored the Three need theory of motivation where need for
achievement was a major characteristic to develop proactive behavior in
individual towards CSR activities.
The volunteers would be made to realize the importance of their
contribution towards social causes.
2. Environmental Factors Controlling the Carbon emission was a major issue
across all the companies in the power sector. TPC was working with
agencies such as American Electric power and Vattenfall to implement
the 3C model (combat climate change) to take care of the externalities
caused by power generation.
TPC was facing a challenge on how to use CSR as a tool to cater
environmental issues. There was also a criticality involved in maintaining

the standards laid down by NAAQS and TPC was concerned about
sustainability of quality standards.
3. Community development Community development was an important
objective of TATA business philosophy. TPCs belief in serving the
community they were operating helped it to form bond with the rural
segment and also helped them to expand . A joint venture between
Maithon Power and TPC was a proof that such activities also helped TPC to
gain access to new arenas.
4. Community Satisfaction index All the CSR activities at TPC was assessed
on community satisfaction index . The CSR activities were divided into 6
thrust areas such as health, education, Infrastructure, energy,
environment and income generation . The satisfaction index measured the
efficacy of CSR activities in these thrust areas. There was a specialised
council common to all TATA group which monitored TPCs
growth
regarding such activities.
5. Sustainibility of CSR activities: The company requires CSR activities as it is
a way to connect to the villagers or the people from whom land is being
taken in order for TPC to expand. The CSR activities should be performed
in such a way that it ensures sustainable development for the
communities and not just a temporary solution for them. This may include
education, set up of a clinic or training the local people on various income
generation methods which would help the life-long
6. Need for Expansion: The ever growing need for the electricity and power in
the country will require TPC to expand tremendously. This expansion
cannot be curbed as every countrys development rest on its ability to
provide power for its various income generation activities. Hence the CSR
activity of TPC will have to be on its feet that with the expansion of the
company as TPC would not like to be known as a company that expands
on the expense of the livelihood and shelters of the downtrodden.

Constraints
Constrai
nt No
1

What is the constraint?

Financial Constraint

How does it affect your

options?
Expanding the CSR activity in
the company will require more

Man Power Constraint

cash outflow towards a cause

which does not necessarily
create a income. Balancing the
CSR activities keeping in mind
the profitability of the corporate
is an issue
Although currently the number
of volunteers for the CSR
activities are increasing, there is
no assurance of continued
participation of the employees in
the activities.

Options 1
1. Create a separate CSR department within the organization,
employing people solely for this purpose. This will eliminate the
need for employees to take time out of their otherwise busy
schedule to spend on CSR activities.
Pros
Cons
Employees employed solely for
A separate department for CSR
this purpose will be more
activities which do not really
committed and hence the results
generate an income would
would be better as more ideas
sometimes prove too costly for
will pour in.
the company. This might affect
This step would ensure a long
the profitability of the company
term sustainable solution and
will go a long way in generating
goodwill for the company
Will relieve the other employees
from working extra for CSR
activities( although, people who
are genuinely interested would
still be welcome to help)

Options 2
2. Co-existence of a CSR department along with a PBO/NGO. Striking
a balance between the business and social cause would be the
motive here
Pros:
Cons:
This would help the company in
Gives more bargaining power to
strengthening its CSR activities
the NGOs. If the NGOs are nonas both of these entities worked
cooperative, TPC might face a
towards the same goal.
problem.

Not much of money is required

to tie up with NGOs and these
NGOs who are committed to the
social well being of people would
be ready to help. Hence the
profitiability of the company
would not be affected much

The importance of the CSR

department in TPC might be
undermined if the NGOs are
given most of the say in the CSR
activities.
The NGO has a different modus
operandi which would not
probably align with the culture of
the company

Selected Option No: __1___

Reaso
n1

Reaso
n2
Reaso
n3

This option helps the company to be more structured in its processes

towards the society. It aligns with the vision of the company and would
project the seriousness of the company towards CSR
This would give employees who are dedicated towards the cause and
would help create more meaningful activities would help the people of
the communities in the long run
This would help the company in its endeavour to find a long-term
sustainable solution for the CSR activities. The company has to expand
and hence the CSR activity will have to evolve tremendously. A
separate CSR department would be the required solution.

Action Plan:
Col. Tewary should be able to convince the Company the importance of
CSR activities given the expansion plans.
The separate department would require employees committed to the
purpose of CSR. The hiring policies should be looked into.
The cost to the company while creating a separate CSR department should
be monitored.
The CSR activities should complement the expansion plans of the
company and make sure that the separate CSR department does not hurt
the profitability of TPC
The CSR department will be given more importance as they would be a
part of the meetings which discusses expansion plans. This would help the
department to plan better.