How CSR Affects Competitive Advantage and Reputation

Contents

1 Introduction

1.1 Background

1.2 Research question

1.3 Significance of study

1.4 Structure of dissertation

1.5 Methodology

2 Literature review

2.1 Introduction to CSR

2.2 Evolution of CSR

2.2.1 CSR in 1950’s

2.2.2 CSR in 1960’s

2.2.3 CSR in 1970’s

2.2.4 CSR in 1980’s and 1990’s

2.2.5 Definition of CSR in current business environment

2.3 CSR in India

2.4 CSR concepts and theories

2.4.1 The pyramid of Corporate Social Responsibility by Archie Carroll

2.4.2 Stakeholders theory and CSR

2.5 CSR and Competitive advantage

2.5.1 What is competitive advantage?

2.5.2 Link between CSR and Competitive advantage

2.5.3 Effects of CSR on Competitive advantage of a firm

2.6 Effects of CSR on firm’s reputation

2.6.1 What is reputation?

2.6.2 How does CSR effects firms reputation?

2.7 CSR & Tata motors in India

3 METHODOLOGY

3.1 Introduction

3.2 Research philosophy

3.3 Research method

3.4 Research approach

3.5 Research strategy

3.6 Data collection and analysis

3.7 Limitations

1 Introduction

1.1 Background

This dissertation discusses CSR and how it can affect a firm’s competitive advantage and its reputation in the market. For decades corporate social responsibility has been a major topic of discussion among the business scholars and researchers who have investigated the relationship between CSR and its effects on a company’s performance. Although there is no set benchmark that can measure the impact of CSR on firm’s competitive advantage and reputation. (Forbes.com, 2018)

Corporate social responsibility can be defined as types of business practices that are formed in line with societal expectations. CSR focuses on internal reforms that may far exceed the legal benchmark, henceforth raising standards of the corporate conduct. (openDemocracy, 2018)

The main concern for any organization is to enhance the performance and reputation in the market. CSR has been advised as a successful administration advise to enhance and strengthen the performance of a firm and create a better picture in the minds of the stakeholders and society. Most of the firms engage in CSR activities voluntarily whereas in some areas there’s an obligation from government to the companies to perform CSR in order to protect the environment and society.

There has been a growing competition among the companies in every sector. The companies have been trying to create competitive advantage to endure this growing competition. In recent times CSR and competitive advantage has been much admired topic in academia. To gain a competitive advantage and improve its reputation the companies have been trying to perform responsibly in context to the society.

Corporate Social Responsibility and Firm Performance: The Moderating Role of Reputation and Institutional Investors (PDF Download Available). Available from: https://www.researchgate.net/publication/277945317_Corporate_Social_Responsibility_and_Firm_Performance_The_Moderating_Role_of_Reputation_and_Institutional_Investors [accessed Apr 04 2018].

http://arno.uvt.nl/show.cgi?fid=122218

https://link.springer.com/article/10.1057/dbm.2012.19

https://www.researchgate.net/publication/277945317_Corporate_Social_Responsibility_and_Firm_Performance_The_Moderating_Role_of_Reputation_and_Institutional_Investors

1.2 Research question

Nowadays business try to focus on their activities and the impact of their activities on society, environment, employees, and various stakeholders. Which has lead to an increasing interest in Corporate social responsibility amongst the organisations. The study tends to investigate the effects of CSR on a company’s competitive advantage and its reputation. The first question that will be addressed in this research is what is CSR? Secondly how a firm carry out its communication on corporate social responsibility and different strategies to carry out these activities. And thirdly how a company can gain a competitive advantage by carrying out CSR activities and how it enhances the firm’s reputation in the society. In addition, this research will give managers a clear picture on how CSR can create competitive advantage and enhance company’s reputation.

To address the above stated questions topics and theories related to CSR will be examined. Using previous theories and research a theoretical framework will be formed in this research paper.

1.3 Significance of study

As already mentioned CSR is a widely discussed topic in todays world and a lot of researches and theories have been provided on CSR. But there hasn’t been clear explanation on the influence of CSR on competitive advantage and firm’s reputation.  The findings from this study will contribute to a compete understating of CSR and how companies carry out CSR activities to enhance their reputation. This study will provide a link between CSR and competitive advantage of firm.

This report will provide insights about CSR not only from an academic point of view but also managerial standpoint. The study will contribute to academic literature by providing a clear insight about how CSR activities can be helpful to create competitive advantage and firm’s reputation.

Apart from academic standpoint the study will be equally critical from an applied perspective. For managers it is important to find a way in which a company can increase its competitive advantage and improve its brand image. The findings of this study will provide managers a clear guidance on achieving competitive advantage and be successful in this unpredictable and competitive world of business.

1.4 Structure of dissertation

The outline of this dissertation is structured in a particular way to represent the thoughts and findings. This research paper is structured as follows.

The first chapter of this paper is the introduction of the topic of dissertation which includes a brief background of the topic (CSR), research question, significance of the study and methodology used to carry out the research.

Second chapter of the dissertation is the Literature review which includes an in-depth analysis of topic. It consists of the definition of CSR, relevant theories of CSR, information about the country of study and the chosen company.

1.5 Methodology

"Not everything that can be counted counts, and not everything that counts can be counted "

(Albert Einstein)

Qualitative research involves the understanding of social aspects of life and cannot be quantified. This research does not generate numbers and data that can be formulated into graphs and other presentable methods. However, it provides more explanatory view of the data analysis. (Cloudfront.ualberta.ca, 2018)

This research will use qualitative approach which can be further classified as a literature-based methodology. (Socscidiss.bham.ac.uk, 2018) The information used in this dissertation will only be from secondary sources. This research does not include any primary data from questionnaire, surveys, experiments, or other field studies. This methodology will be used to explain the effect of CSR on competitive advantage and reputation of TATA motors.

The data from other researchers work, internet, journals, articles, magazines, and database from different sites on CSR and TATA motors will be used to carry out the analysis and successfully answer the dissertation question. A desk research will be carried out by gathering information on corporate social responsibility, firm’s reputation, competitive advantage, managerial conduct, and corporate strategies.

http://www.umsl.edu/~lindquists/qualdsgn.html

https://cloudfront.ualberta.ca/-/media/science/research-and-teaching/teaching/qualitative-research-methodology.pdf

2 Literature review

This chapter will go through the different theories, models and definitions that have been used to describe CSR. CSR has had an ever-evolving definition which at times can make it difficult to understand and henceforth through time-study this literature review will provide readers with a precise understandable definition. Firstly, there will be a clear definition of CSR and the evolving definitions of CSR throughout these years. Then this chapter will provide an overview on the importance of CSR for an organisation and how it is communicated throughout the organisation. Further, this chapter will discuss about the affects CSR has on the competitive advantage and firm’s reputation.

2.1 Introduction to CSR

Historically CSR has gained profound importance amongst researchers and scholars. For a past few decades companies have been following CSR to represent their contributions to the society.  It is vital to understand that the term CSR does not have a clear definition and also has different terms like Corporate ethics, Corporate accountability, Corporate responsibility etc which are used by different people to address and explain this phenomenon. (Ey.com, 2018) CSR at its core are the business practices conducted in a way that caters to social and ethical responsibilities and also making sure that all the economic and legal requirements are met. Sometimes companies make it a legal compliance to carry out CSR activities in order to set a higher benchmark. The main concerns of stakeholders and companies should act responsibly keeping in mind the impact of their activities on society and the environment is a positive one.

European union has described CSR as a concept to ensure the environment and social betterment to be included in company’s operation to be successful. Companies use their profits for social and environmental development. However, it is crucial to understand that CSR also takes into account the actions and ways these profits were earned. Henceforth it is extremely important for a company to be fully transparent amongst its various stakeholders.  In short CSR is all about maximising positive impact on the society and environment in a sustainable manner.

2.2 Evolution of CSR

For centuries the concept of CSR has been a crucial part of business practices. The CSR can be traced back to the Ancient Mesopotamian era in 1700 BC, where King Hammurabi introduced death penalty to builders, farmers etc for negligence of inconvenience and death caused to the local citizens. (BRASS, n.d.). The evolution of CSR can be categorised in different phases.

2.2.1 CSR in 1950’s

A new era of CSR began in 1950’s by G. Bowen when he published his work under the name of “social responsibility of businessman” in 1953. It aimed to explain the meaning of the concept of CSR and the scope for further study on the concept of CSR.

According to Bowen CSR consists of decision making, actions and policies that businessmen are obliged to follow which enforces the societal objectives and values. As quoted in G. Bowens book CSR is “the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society” (Bowen, 1953, p.6). G. Bowen stated that any CSR activities carried out by businesses to their own self-interest by showing their concern for public demands.

2.2.2 CSR in 1960’s

A new approach to CSR was introduced in 1960’s due to the increasing environmental problems. The more accurate meaning of CSR was given in 1960’s by scholars like K. Davis (1960) who suggested that the CSR should be looked in a different manner apart from financial motives of firms to engage in CSR activities. A new dimension to CSR was introduced which focus on moral values than financial or technical interest. It suggested that the CSR activities shouldn’t be just carried out for firms benefits but it should be done because it is the right thing to do for the community as a whole.

2.2.3 CSR in 1970’s

Further in 1970’s more specific definition of CSR was provided by authors like Johnson (1971); Sethi (1975); Eells and Walton (1974); Steiner (1971); Preston (1975) and Carroll (1979). During this phase CSR was seen as a driving force for economical, ethical, social and stakeholder’s obligations. In 1971 Jhonson proposed that employees, dealers, suppliers, communities, and nation as a whole should be taken into account to be a socially responsible business. Whereas Stiner in 1971 viewed that the organisations that benefit the society in the process of achieving its goals have a certain attitude that makes them more socially responsible. If we look at Carroll (1979); we can see that a three-dimensional model corporate performance was introduced which focused on areas such as the philosophy of social responsiveness along with any social issues and responsibility that may be involved. This period thus marked the importance to take actions in the major areas like economic development, education of society, employment, opportunities, cultural and medical developments, and government regulations. (Frederick, 2006).

2.2.4 CSR in 1980’s and 1990’s

In 1980’s no further improvement in definition of CSR was found. Most of the research which was done in 1970’s was continued in 1980’s like the three-dimensional concept proposed by Carroll (1979) and the other terms like stakeholder theory, corporate social responsibility, Corporate social performance and business ethics were used to explain the concept of CSR. This period shifted the focus of companies to internal and external environment without sacrificing the environmental norms and societal betterment. this lead to an adoption of a managerial approach for CSR analysis Carroll (1977). Even after all the research carried out throughout these decades CSR has not still not been clearly defined (Clarkson,1995). Clarkson, M. B. E. (1995). A stakeholder framework for analysing and evaluating corpora. Academy of Management Review, 20(1), 92.

2.2.5 Definition of CSR in current business environment

As we have seen the concept of CSR is evolved throughout these years. Still a clear definition of CSR has not been given after all the research which shows that CSR is a very broad and a complicated concept. In today’s world the researchers focus more on how to carry out CSR rather than why to carry out CSR. The scholars like Dahlsurd (2008); Panapanaan, Linnanen, Karvonen and Phan (2003) have further studied the concept of CSR under these five dimensions: social, environmental, economic and stakeholders. This means that to be corporate social responsible the companies should take into account all these dimensions. Some of the theories are as follows:

• Smith in 2013 believed that to gain consumer trust it is important to market the local goods, however negative views started taking place as environmental efforts affected the customer service drastically.
• Oppewell et al. in 2006 discovered that certain CSR activities are more attractive for consumers as compared to others. It was recommended that different businesses focus on certain activities that attract their consumer market.
• Again in 2006 Becker-Olsen found that it was imperative that companies must carry out CSR activities which are tailored specifically to help meet organisational goals. If these activities are not aligned with company goals, then it can have a negative impact on the organisation.

Over the decades a lot of research has been done on CSR and so far, there has not been a single definition that could describe this as a whole. CSR can be defined as an area of business environment that can make or break a company’s reputation. Organisations need to make sure that the activities conducted are sustainable and promotes economic and social welfare keeping in mind that any negative environmental factors that arise due to company’s business processes are dealt with effectively. (1919)

http://www.manilatimes.net/evolution-corporate-social-responsibility/329908/

https://www.projectguru.in/publications/evolution-of-corporate-social-responsibility/

http://www.academicstar.us/UploadFile/Picture/2014-6/201461410571606.pdf

https://thinkingshift.wordpress.com/2007/03/27/the-evolution-of-csr/

https://ac.els-cdn.com/S1877042812051154/1-s2.0-S1877042812051154-main.pdf?_tid=60f403b0-c4a0-41b8-bf4a-1319182026dc&acdnat=1524222577_468f2f7f2e69afb2dcef7d269fadd0f0

https://www.emeraldinsight.com/doi/abs/10.1108/1747111111117511

2.3 CSR in India

CSR has been a part of India since ancient times. India has always been involved very closely with businesses for national development and social causes. CSR in India passed through various stages. The first phase which is the pre-industrial period i.e. until 1890’s the businessmen who were also known as the merchants spend their life serving the community by building temples, helping the community in times of crisis. Social duty, charity and religion acted as the pillars of CSR for India at that time. After 1890’s when India was colonised the western industrialisation happened. The key drivers for CSR in India were the social objectives, economic welfare and also the political objectives. TATA, Birla, Modi, Bajaj, Godrej were some of the few industrial families who were strongly dedicated towards the societal developments and economic growth after the industrialisation in 19^th century.

The second phase marked the period between (1914-1960) where India was struggling for its independence from Britain. During this period Gandhi gave the philosophy of trusteeship and aimed to enhance he situation for the society and local businesses. He brought into light the importance of PSU’s for the overall development.

This gave rise to the third phase which was the post-independence period where India had a mixed economy which gave rise to the Public-sector units, environmental and labour laws. The states initiative to help the needy led to the setting up of PSU’s.

The fourth phase which is also known as the period of where India was going though liberalisation and globalisation. This attracted a lot of foreign companies in India which enhanced the competition in market. With globalisation came international CSR standards which motivated Indian companies to meet these standards helping them improve business reputation along with a high rate of customer satisfaction. These factors led to a positive movement towards CSR in India.

India is one of the top Asian companies which gained importance of CSR. Also, under The Company Act,2013 in April 2014 India became the first country to mandate the Corporate Social responsibility in order to create welfare of society by investing the profits earned by businesses into education, poverty and gender equality.

http://www.fiinovation.co.in/corporate-social-responsibility/

http://shodh.inflibnet.ac.in/bitstream/123456789/2123/1/synopsis.pdf

https://www.indiainfoline.com/article/general-csr/india%E2%80%99s-csr-journey-and-scenario-today-113111802355_1.html

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2190485

https://www.india-briefing.com/news/corporate-social-responsibility-india-5511.html/

2.4 CSR concepts and theories

2.4.1 The pyramid of Corporate Social Responsibility by Archie Carroll

This CSR pyramid is a framework developed by Archie Carroll helps argue the reasons for organisation to fulfil their social responsibilities. Carroll’s view on an organisation is that it has a wider purpose and social responsibility but never denied the importance of profit making for the organisation. Henceforth Carroll developed a CSR pyramid which is divided into four different elements with economic element at the bottom followed by Legal, Ethical and Philanthropic as shown below. (Anon, 2018)

Economic responsibilities

For a business it is first necessary to be profitable. A business providing goods and services needs to fulfil their shareholders expectations on their investment. Their customers are needed to be satisfied with quality goods or services at a reasonable price and it is important to keep itself profitable in order to thrive and remain alive. Without profit, an organisation can’t think about being a good corporate citizen and henceforth economic responsibility is placed at the bottom as the base foundation for the pyramid.

Legal responsibilities

This require firms to meet government expectations and law. Compliance with government policies and all legalities are extremely important as the business won’t be able to thrive without following proper government procedures instead they may be fined or prosecuted for not meeting government standards for instance, health and safety is very crucial for a company that runs a theme park as because negligence can cause harm to people and even death. Following proper Health and Safety procedures will help keep the theme park safe.

Ethical responsibilities

Social responsibility for an organisation can be viewed as an ethical framework which may suggest that there is an obligation that may be required to fulfil for the benefit of society. In simple terms it is the responsibility of an individual or an organisation to do the right thing. For example, the working conditions offered to employees or how various stakeholders are treated such as the suppliers.

Philanthropic responsibilities

This can be found at the top of the pyramid as it focuses on giving back to the society that it can. This may include things like charitable donations, aiding private or public educational institutes or engagement programs with the society for human prosperity and welfare.

https://www.tutor2u.net/business/reference/carrolls-csr-pyramid

https://www.slideshare.net/syedhasnainahmedSHAH/csr-48785079

2.4.2 Stakeholders theory and CSR

Stakeholder theory can be defined as a framework where moral and ethical values are addressed by the business ethics and its management for managing the business or any other organisation. (BusinessDictionary.com, 2018)

According to Edward Freeman’s stakeholder theory; anyone who is affected by a company in any way are its stakeholders. This may include, government institutions, customers, supplier’s, local communities etc. It is necessary that all the company’s stakeholders are satisfied to become successful in the long run. For instance, if a company forces its projects on a community then its bound to fail. Similarly, if employees in a company are not treated right then failure is undeniable. Such actions may bring short term success and profits, but it won’t sustain itself in the long run. (Smartsheet, 2018)

When a company is obligated to fulfil all stakeholder interests, then this process is known as stakeholder management. It is no easy task for any organisation to fulfil every stakeholder’s interests simultaneously henceforth organisations need to identify and develop strategies for managing its stakeholders. Stakeholder management helps companies allocate resources much effectively as it helps identify and take into account any internal and external stakeholders. (Menadzment.tfbor.bg.ac.rs, 2018)

In a company it is very important to achieve profits and growth as because the company stakeholders such as the shareholders usually want a good return on their investment. If the company fails to achieve high profits, then these stakeholders pressurise the company management or would simply sell off their shares. This shows that these stakeholders can affect a company’s CSR activities dramatically. https://link.springer.com/article/10.1057%2Fpalgrave.abm.9200218

file:///C:/Users/Dhruv%20Negi/Downloads/6905-26692-1-PB.pdf

2.5 CSR and Competitive advantage

2.5.1 What is competitive advantage?

Competitive advantage at its core for a business is being at a much favourable position in order to be more profitable than its competitors. In order to do so, an organisation must be able to show a differential value, or a better comparative as opposed to its competition making sure that this information is conveyed to the target market appropriately. (SearchCIO, 2018)

Porter’s Generic competitive strategies

According to Porter, a firm’s profitability is determined by their relative position within the industry which shows if the profitability is above or below the industry average. Sustainable competitive advantage is the fundamental basis for above average profitability in the long term.

Porter divided competitive advantage into two basic parts:

• Low cost
• Differentiation

When these two are combined, taking into consideration the wide range of activities conducted by a firm, leads to three generic strategies; cost leadership, differentiation, and focus. Furthermore, the focus strategy can be divided into cost focus and differentiation focus.

Cost Leadership: Here a company chooses to become a low-cost producer of goods or services within the industry it operates. Achieving such cost advantages can be done by access to cheaper raw material, economies of scale or technology. If an organisation manages to find a sustainable cost advantage, then its profitability will grow above the industry average.

Differentiation: A company opting for this strategy requires to have something unique that none of its competition has and is of value to its potential customers. This strategy allows for companies to put a premium price on their products or services and reap substantial profits.

Focus: In this strategy an organisation will select a segment or a group of segments and tailor its strategies accordingly in order to meet their needs excluding the other. This strategy has two variants namely cost focus and differentiation focus. In cost focus the company will aim to attain cost advantage within its targeted segment. Differentiation focus is when a company will aim to achieve differentiation within it target segment. This strategy will require an unusual demand for certain product or service from that target segment or the company may need to have a production and delivery system that caters to the target segment and differs from other industry segment.

https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-strategies/

2.5.2 Link between CSR and Competitive advantage

CSR and Competitive advantage will pose a promising future for the business only if a company’s interest along with social and environmental needs are coordinated in an effective manner. Doing so will positively affect the community and the company in a positive way. If being responsible did not affect a company’s finances, then more organisations would be pressured into practicing responsible corporate behaviour. There would be an increased pressure on companies to become socially responsible only if it was cost effective. The three management processes namely strategy, responsibility and stakeholder are the foundation for linking CSR with competitive advantage. Competitiveness of a company is directly influenced by CSR as because it helps enhance the company vision in a more sustainable manner through the strategies put in place. This also helps the company to form better relationship with its primary stakeholders via stakeholder management. The company also becomes more transparent through its responsible management of business processes. http://www.fm-kp.si/zalozba/ISBN/978-961-266-201-1/papers/MIC4206.pdf

http://www.fm-kp.si/zalozba/ISBN/978-961-266-201-1/papers/MIC4206.pdf

2.6 Effects of CSR on firm’s reputation

This section discusses about the effects of CSR activities on firm’s reputation. Firstly, a clear definition of reputation is provided. Secondly, a detailed analysis on how the firm’s reputation is affected by CSR activities is provided in this section. And thirdly, the firm’s communication of CSR activities to its stakeholders is explained.

2.6.1 What is reputation?

To have a clear understanding on the affects of CSR it is vital to understand the meaning of reputation, corporate reputation, and the importance of reputation for a company. Reputation can be defined as the people’s opinions and views about a certain thing or a person based on their past experience. (Dictionary, 2018) This is a basic definition of reputation which merely depends on one’s past experience about a certain thing.

It is important for a firm to gain the trust of its customers and other stakeholders as they have a direct influence on a firm’s reputation in the market. The measurement of reputation has evolved throughout these years, initially businesses used to flourish and expand their business through word of mouth which made it easier for people to rely on the business as they heard something good about it through their friends or family. Nowadays reputation is marked through internet, social media, newspapers, magazines, articles, and journals. With these instant methods of communication businesses have realised the importance of reputation and it has become vital for a company’s survival.

A company’s Corporate reputation can be described as people’s views and feelings towards the company which are mainly based on its upcoming projects and history when compared with its competitors. (Thinking, 2018) The company’s reputation is assessed mainly by the company’s customer, employees, stakeholders, and competitors. The company’s values, products and services, work environment and growth prospects are the main things on which a company’s reputation rely.

2.7 CSR & Tata motors in India

Tata group and Tata Motors

Tata Group operates more than 80 companies ranging from automobiles, software, and consumer goods. It is one of the largest employers in India constituting a total of 200,000 employees. Mr Ratan N. Tata became the chairman of this company in 1991 and was also chosen as the ‘Business Man of the Year’ for Asia in 2004. Under the leadership of Mr Ratan Tata, the company underwent drastic changes namely Globalisation, rationalisation and now innovation making this company nearly as big as Walmart with its attempts of touching the $500 billion mark in revenue by 2020 – 2021.

Dorabji Tata and Ratan Tata the founders of today’s Tata empire have endowed approximately two third of the total equity of the parent firm ‘Tata Sons Ltd’ by philanthropic trusts in the 1860s. these trusts were created as a medium where the company puts in an average of 8 to 14 percent of its net profits on a yearly basis for the betterment of different social causes. In the late 90s the economic climate had changed for the worse, however Tata’s commitment for the welfare of society could be seen as they kept increasing the amount from Rs670 million between 1997 – 1998 to Rs 1.36 Billion in 1999 – 2000 for various social causes.  Rs 450 million was invested for social causes in the fiscal year of 2004. http://lib.vcomsats.edu.pk/library/MGT610/Course%20Contents/Handouts/MGT610/Tata%20Case%20Study%20on%20CSR.pdf

Tata Motors

Tata motors was previously called TELCO (TATA Engineering and Locomotive Company) and was established in 1945 in India as an automotive manufacturing company and a subsidiary of the Tata Group.  In 1954 Tata Motors started the manufacture of commercialised vehicles and has become India’s biggest automobile company. It is also the fifth largest manufacturer of medium and heavy sized commercial automobiles. With its innovation and dedication, the company has grown drastically and is often accredited for establishing India on the automotive map for designing and manufacturing its own cars.

https://www.slideshare.net/bharatgoyal44/project-summary-report-on-tata-motors-by-bharat-goyal

It is a multinational company with its headquarters based in Maharashtra and Mumbai. Internationally Tata Motors manufacturing plants are located in Thailand, Argentina, South Africa and United Kingdom. Tata Motors has a joint venture with Marcopolo S.A. a manufacturing firm of construction equipment. It is also in Joint venture with FiatChrysler (manufactures automotive components and branded vehicles) and Hitachi (construction machinery).

https://www.slideshare.net/RahulGulaganji/tata-motors-csr-activity-ppt-20152016

TATA’s views on CSR

Serving the community is the purpose of this company. TATA believes that community is the very purpose of its existence and does not categorise it as a simple stakeholder of the company. It has its focus on improved quality of life for people and wants to push human excellence to its utmost potential through different community programs. TATA has a proactive approach towards environmental concerns arising from its business operations and consider them as social responsibility, henceforth integrating environmental management and social development together. The company has a volunteering culture that enable TATA to encourage its committed employees to spare their time and skill in service for the underprivileged. TATA is always willing and open to work with other players who are involved in community development practices. The company has institutionalised its business process with social responsibility which can be seen through the management support and involvement in various community programs. Engagement of employees in such programs and sharing of knowledge and core competencies show how TATA is working towards different aspects of CSR.

http://iica.in/images/Ms_Achala%20Kumar_Principal_Executive_Officer_TATA.pdf

TATA Motors CSR activities

Tata Motors have divided its CSR activities into 5 different categories:

• Aarogya – Health
• Amruthdhara – Drinking Water
• Vidyadhanam – Education
• Kaushalya – Employability
• Vasundhara – Environment

Environmental activities (Vasundhara): The company planted 25,000 trees on the World Environment Day across India, Africa, Middle East, Russia, and other countries in SAARC region. 100,000 saplings were also planted throughout the monsoon period. Tata Motors also partnered with the forest department and worked with the Vangujjar (a nomadic tribe) community to promote campaigns such as ‘Save the Forest’ which focused on increasing awareness regarding environmental issues and concerns such as protecting the forest and preserving its biodiversity. Through this campaign a total of 1000 sapling were planted, and an oath was taken by the elected member of this tribe to maintain and protect these saplings. Company employees also played a crucial role in this program showing this company’s stakeholder engagement and participation for a sustainable environment.

http://lib.vcomsats.edu.pk/library/MGT610/Course%20Contents/Handouts/MGT610/Tata%20Case%20Study%20on%20CSR.pdf

Aarogya: Here the focus for TATA Motors is to improve upon the maternal and infant mortality with a little extra attention to woman that are pregnant. As there is lack of basic health support in villages; Tata Motors have taken on the task to provide these people with health services through medical camps and also help provide information to the community regarding balanced healthy diet, malnutrition and much more. For instance, in Lucknow Jan Kalyan Santhan and Samaj Vikas Kendra were made operational whose main responsibilities were for the development of rural areas and providing health care services and information for the underprivileged.

Vidyadhanam: Education plays a vital part in people’s life and is one of the most crucial aspects of life for an individual and for the country itself. The underprivileged resort to go to municipal schools, however there are plenty of myriad problems involved with these such as shortage of teachers which can have a negative impact on student performance henceforth Tata Motors worked alongside Global Education Trust who then worked together and provided special coaching’s in 146 municipal schools to 23,000 students. This program provided qualified teachers for these students and also e- learning material for students with a focus on a better education quality. Investments have been made in several scholarship programmes across India, like the Vidyadhanna scholarship program where the company supported 211 students out of which 132 students came from underprivileged areas of the society. These students were provided with books and other important study material along with access to different kinds of workshops and many creative & outdoor sessions. They were also provided residential places. Tata Motors have made a Public – Private partnership or PPP which is working towards upgrading 10 Industrial Technical Institutes nationwide.

Amrutdhara: This CSR head deals with water related problems. In rural India there is extreme water shortages and people spend six hours of the day to retrieve water from far off place in pots and the whole journey is made on foot on uneven terrain that can have an adverse effect on their health.  Tata Motors focus on the most rural parts of the country with drought related issues to provide solution for such basic human needs. The focus is on to develop institutions for the community which ensure clean water structures are developed and appropriately maintained.

Kaushalya: this deals with employability and enhancing of people skills and knowledge. For this issue Tata Motors partnered with several stakeholders to run a skill development programme for the youth largely focussing on automotive trade. Tata Motors also runs several agricultural programs that have impacted people’s lives in a positive manner for example Rajendra Lal works as agricultural labourer and has never had any prior education with complete dependence on farming. He was incurring extreme losses for years now and decided to attend Tata Motors sustainable agriculture awareness program. The information he acquired on sustainable practices were put in use and within the first year he cut down costs on chemicals such as insecticides by half. He also learnt to produce manure at home that helped him further cut costs and was able to transform his life for the better.

Tata Motors also engage in re cycling activities where they encourage recycling of scrap wood into furniture and with Tata Motors Grihini Social Welfare Society; they assist several employees and women in producing things like pickles, electric cable harnesses and many more resulting in financial security for these people. (5000)

https://www.slideshare.net/RahulGulaganji/tata-motors-csr-activity-ppt-20152016

https://www.slideshare.net/MuditaMalviya/dissertation-on-tata-csr

https://www.tatamotors.com/corporate-social-responsibility/

http://troindia.in/journal/ijcesr/vol5iss2part4/34-42.pdf

http://lib.vcomsats.edu.pk/library/MGT610/Course%20Contents/Handouts/MGT610/Tata%20Case%20Study%20on%20CSR.pdf

http://troindia.in/journal/ijcesr/vol4iss12/23-26.pdf

http://iica.in/images/Ms_Achala%20Kumar_Principal_Executive_Officer_TATA.pdf

3 METHODOLOGY

3.1 Introduction

The purpose of this study is to investigate the effects of CSR activities on competitive advantage and reputation of the firm. This chapter mainly describes the research methods used to address the research question. It highlights the research methods and approaches used throughout the research by discussing its advantages and disadvantages also how these methods are practically applicable to my research. As described by O’Leary research methodology is a philosophical framework which is related to a set of practical assumptions that we use to carry out the research. O’Leary Z. 2004 “The essential guide to doing research”. Sage.  This paper analyses the effects of CSR activities on company’s competitive advantage and reputation by using primary data.

3.2 Research philosophy

Research philosophy in simple terms can be called as “beliefs” or “assumptions” regarding the way in which data is collected, used and analysed. It deals with the sources and development of knowledge. The three main types of research philosophies based on these assumptions are ontology, epistemology and axiology. The decision on choice of philosophy depends on the type and nature of research and the intricacy of the research. (Prospect, 2018)

3.3 Research method

In order to fulfil the objectives of the research I used a qualitative research approach. Qualitative research is a type of research that deals with non-numerical data which is analysed and interpreted to create an understanding of social life of the target audience. https://www.thoughtco.com/qualitative-research-methods-3026555. This type of research approach is used to answer the questions which begins with “how” or “why” in order to get a clear understanding about the topic of discussion. https://lib.dr.iastate.edu/cgi/viewcontent.cgi?article=3016&context=etd. The main characteristic of qualitative research is that it constitutes an in-dept analysis and description of the research topic, keeping in mind that the scope and nature of the research is not limited. The data used in this research is mainly in form of word instead of numbers making a bit subjective in nature. https://www.researchgate.net/publication/270956555_CHAPTER_3_-_RESEARCH_METHODOLOGY_Data_collection_method_and_Research_tools. Qualitative data can be gathered from interviews, observations, review of documents and focus groups. In this research paper the data is gathered mostly by journals, articles and review of documents and researches done by other scholars. Hughes, G. (1990), The Philosophy of Social Research, 2nd Edition, Harlow: Longman.

There are various types of methods in which qualitative research takes place. In this section I have mentioned and explained the methods I have used to carry out my research.

HISTORICAL ANALYSIS:  this research has followed a historical analysis as a method of qualitative studies. In this type of method, we basically go through the historical events and theories provided by different authors and researchers in their research. To provide a clear understanding of CSR and how the nature of its activities has evolved throughout the generations a historical analysis has been done. For a topic like CSR which is so vast in nature and hasn’t been clearly defined till date this type of approach is viable to understand the trends it has followed throughout these years and how its meaning and importance has changed. https://www.sagepub.com/sites/default/files/upm-binaries/10985_Chapter_4.pdf

https://www.macmillanihe.com/studentstudyskills/page/choosing-appropriate-research-methodologies/

https://research-methodology.net/research-methodology/

3.4 Research approach

In this research paper I have followed an inductive research approach. There are mainly two types of approaches to research that is inductive or deductive. Inductive approach refers to the generation of new theories while deductive approach mainly refers to the testing of the theories. Inductive approach usually starts with the observations and deductive approach starts with hypothesis. The end result of inductive approach is a new theory whereas for deductive it is acceptance or rejection. The reason for selecting this approach is that inductive approach is majorly associated with small samples that are included in qualitative research. The main limitation to this approach is that it concentrates on small samples of data and observations, so their theories provided can questionable at times.

http://deborahgabriel.com/2013/03/17/inductive-and-deductive-approaches-to-research/

https://www.slideshare.net/RohanByanjankar/inductive-and-deductive-approach-to-research-difference-between-inductive-and-deductive-reasoning-to-research-with-figure-and-examples

3.5 Research strategy

The research strategy used in this paper is an applied one rather than a new one. This research paper refers to different researches done by other scholars to define the meaning and importance of CSR activities and how they effect on firm’s competitive advantage and reputation.

3.6 Data collection and analysis

The data collection method used in this research paper is through content analysis by reviewing the various collected documents. Which includes the background and theoretical knowledge and data related to the topic of discussion. In the qualitative research method that I have used the data has been gathered and analysed from the work of other authors, reviewing of documents by many authors and scholars have been done. All these data to review the historical knowledge and theoretical knowledge of CSR has been gathered from books, magazines, journals, articles, and database from different sites. Topics like CSR, competitive advantage, firm’s reputation, and links between all these have been used to carry out the search on internet and websites. The most important strength of content analysis is that its easy to clearly state the emphasis on the data which has been collected.

https://www.sagepub.com/sites/default/files/upm-binaries/10985_Chapter_4.pdf

3.7 Limitations

The major limitation in this research paper is the time constraint which limited me from using just secondary research and qualitive data instead of quantitative data analysis which could have given a more exact impact of CSR on firm’s performance. Other limitation of the study is that it just focuses on TATA motors which is a subsidiary of TATA Group for case study so the results and findings about the effects of CSR on firm’s competitive advantage and reputation can not be generalised. Another major source of uncertainty is in the method used to collect data as this research is totally based on desk research which is though gathering data from internet, journals etc instead of interviews, focus groups which could have given a more in-depth analysis and practical knowledge about the topic of discussion. Qualitative research method does not countenance the numerical measurement of the problem.

https://www.researchgate.net/publication/270956555_CHAPTER_3_-_RESEARCH_METHODOLOGY_Data_collection_method_and_Research_tools

Carr, L. T. (1994). The strengths and weaknesses of quantitative and qualitative research: what method for nursing?. Journal of advanced nursing, 20(4), 716-721.

https://www.thoughtco.com/qualitative-research-methods-3026555

4 Bibliography

Forbes.com. (2018). Forbes Welcome. [online] Available at: https://www.forbes.com/2008/10/16/corporate-social-responsibility-corprespons08-lead-cx_mn_de_tw_1016csr_land.html#404297f276e3 [Accessed 12 Apr. 2018].

openDemocracy. (2018). openDemocracy. [online] Available at: https://www.opendemocracy.net/ [Accessed 12 April 2018].

Cloudfront.ualberta.ca. (2018). [online] Available at: https://cloudfront.ualberta.ca/-/media/science/research-and-teaching/teaching/qualitative-research-methodology.pdf [Accessed 15 Apr. 2018].

Socscidiss.bham.ac.uk. (2018). Research methodologies. [online] Available at: http://www.socscidiss.bham.ac.uk/methodologies.html [Accessed 15 Apr. 2018].

Ey.com. (2018). [online] Available at: http://www.ey.com/Publication/vwLUAssets/EY-Government-and-Public-Sector-Corporate-Social-Responsibility-in-India/$File/EY-Corporate-Social-Responsibility-in-India.pdf [Accessed 18 Apr. 2018].

Anon, (2018). [online] Available at: https://www.researchgate.net/figure/Carrolls-pyramid-model-of-corporate-social-responsibility-Carroll-1991_fig1_308937632 [Accessed 18 Apr. 2018].

BusinessDictionary.com. (2018). What is stakeholder theory? definition and meaning. [online] Available at: http://www.businessdictionary.com/definition/stakeholder-theory.html [Accessed 20 Apr. 2018].

Smartsheet. (2018). What Is Stakeholder Theory? | Smartsheet. [online] Available at: https://www.smartsheet.com/what-stakeholder-theory-and-how-does-it-impact-organization [Accessed 20 Apr. 2018].

Menadzment.tfbor.bg.ac.rs. (2018). [online] Available at: http://menadzment.tfbor.bg.ac.rs/english/wp-content/uploads/sites/2/2017/02/3_1_24-35.pdf [Accessed 20 Apr. 2018].

SearchCIO. (2018). What is competitive advantage? – Definition from WhatIs.com. [online] Available at: https://searchcio.techtarget.com/definition/competitive-advantage [Accessed 23 Apr. 2018].

Dictionary, r. (2018). reputation Meaning in the Cambridge English Dictionary. [online] Dictionary.cambridge.org. Available at: https://dictionary.cambridge.org/dictionary/english/reputation. [Accessed 23 Apr. 2018].

Thinking, F. (2018). What Is Corporate Reputation? | Fresh Business Thinking. [online] Fresh Business Thinking. Available at: http://www.freshbusinessthinking.com/what-is-corporate-reputation/ [Accessed 23 Apr. 2018].

Prospect, H. (2018). How to Write Methodology for Dissertation | Research Prospect. [online] Researchprospect.com. Available at: https://www.researchprospect.com/how-to-write-methodology-for-dissertation/ [Accessed 29 Apr. 2018].