Corporate Responsibility Strategy Development For Maruti Suzuki Management Essay

Corporate Responsibility Strategy evolution For Maruti Suzuki c atomic number 18 EssayThe inform is on Corporate Responsibility practice shortly in Maruti Suzuki India Limited, review of their instruction execution and recommending a strategy which delivers positive appraise with a sustainable competitive advantage. Maruti Suzuki India Limited is major concerns ar the fag issues ca mapd by the slim down, young and restless and the environmental dissemble.With the sensory faculty of environmental aspect, customers be shifting towards eco-friendly products and valuing product which are doing so. Regulation and global competition on becoming much environmental friendly organisation is pushing companies to do much on reducing consumption and waste.The corporate function issues in revalue chain across the three category environsal , hearty and Economic is analysed and is tabulated with the prioritised impacts. Then the current performance highlights of the MSIL in the environmental , well-disposed and Economic from their annual Corporate Responsibility Report. The short comes and areas of melioratement are discussed.With the issues and the present performance of corporate responsibility, a better responsible pot is created. A corporate responsibility strategy is developed to get along value. excogitationMaruti Suzuki India Limited (MSIL, formerly known as Maruti Udyog Limited) is a subsidiary of Suzuki take Corporation, Japan. Maruti Suzuki claims to be the leader of the Indian car grocery for everywhere dickens and a half decades. The company has two manufacturing facilities located at Gurgaon and Manesar, India. both(prenominal) the facilities work a combined capability to produce over a 1.5 million vehicles annu eachy. The company plans to expand its manufacturing capacity to 1.75 million by 2013. Maruti Suzuki contributes 45 % of essence assiduity gross sales in India. Maruti Suzuki is the entirely Indian participation to have crossed the 10 million sales mark since its stock since 1983. In 2011-12, the company sold over 1.13 million vehicles including 127,379 units of exports. (Maruthi Suzuki, 2012).The keep company employs over 9000 people (as on 31st March, 2012). Maruti Suzukis sales and service network is unity of the largest among car manufacturers in India. The Company has been rated first in customer merriment in the JD Power survey for 12 consecutive forms (Maruti Suzuki India Limited, 2012). get a line Maruti pot and Core ValuesFMBAModulesSem 2NBS-M019 corporal RESPONSIBILITYCourseworksvision-banner-bottom.jpg arising (Maruti Suzuki India Limited, 2012)Maruti Suzuki has gained several(prenominal) awards for organisation performance and products. Maruti is be the leader in the automobile industriousness in India and doing their best to improve in their performance. cypher Certifications point of reference (Maruthi Suzuki, 2012)Maruti has a strong presence of its network and availability across India. With a 1100 sales network in 801 cities and 2958 service station in 1408 cities. pack Maruti interior(prenominal) PresenceFMBAModulesSem 2NBS-M019 CORPORATE RESPONSIBILITYCourseworksmap.jpgSource (Maruthi Suzuki, 2012)The Maruti started exporting since 1987, as of 2011 the total units exported was 863,380. Europe has the highest share with 55 % followed by Asia 17 % , Africa 16 % and Latin America 10 % . Re cen sniply they have started exporting to Oceania.Maruti has expanded into policy , Finance , Used Care Sale and pass a languish forethought holding closely aligned with the core wrinkle. Maruti overly has a Joint back with its 19 suppliers who are considered to be vital among the 290 suppliers.Maruti InsuranceMaruti FinanceMaruti TrueValueN2N Fleet Management piece working to enhance stockholder wealth, Maruti Suzuki bequeathing on a regular basis engage with all stakeholders to assess their needs and by dint of its products, services, conduct and di rection initiatives, promote their sustained growth and well-being (Maruthi Suzuki, 2012).There has been issues in the management do to the joint venture agreement between Suzuki and governing body of India , until tardily Government of India has sold its complete share to Indian financial institution. referable to the management changes and pose of job loses dude to the change at that place has been part of unresolved issue with the work force. Since its first operations in 1983 there has been strikes , go slow protest by the savvys. There have been umpteen occurrence in the years 1984,1997,2000,2001,2002,2011 and 2012.The recent incident at Manaser jolt the whole industry, leaving one dead and 100 injured when more than 500 workers broke the office and set it on fire. The reason of this from the labour side is that the contract works get only half the net of the permanent employees withal claim harsh working conditions. Discriminatory comments to a low-caste worker by th e supervisors. The management disagreed to the cast discrimination.Corporate responsibility issues across value chainClean, lean and safe cars are not only societally desirable but they also have the potential to create a competitive advantage for the industry, insofar as they meet these consumer expectations, are low-priced and address needs which are applicable to, and have to be turn to by, the global community as a whole (European Commission, 2006). environs IssuesEnvironment issue is mainly in the Manufacturing of vehicles, inbound component and part manufacturing and Logistics. electrical capacity is consumed in both inbound and operations and their back up advocator supply is powered by fossil burn down both steer to Greenho workout gas. There are waste much(prenominal) as waste waste from the production, shredded metals and residue from raw materials, Oil and lubrication from operation and service, incase materials and weewee waste.Logistics is a major operation as the manufactured vehicles has to be delivered across the country and also to the harbour for exporting. With the just in fourth dimension model the is an increases in the inbound logistic (India transport portal, 2010). The Fossil fuel is used for combustion and this leads to Greenhouse gas potential increasing the one C foot print. render shows the important environment issues across the value chain. icon Environmental issues across the value chainFMBAModulesSem 2NBS-M019 CORPORATE RESPONSIBILITYCourseworkcsrSlide1.JPG accessible IssuesThe recent incident in Manesar says more on the cordial issues which are involved with the workforce management. Even with the industry saying Maruti is best in wage payment they have workforce issue due to the contract workers, young and restless workers (Malini Bureau, 2012). Figure shows the key amicable impacts across the value chain, in societal all the issues are taken as important as failing to respond to it will damage the reputatio n and decrees the tick off value.Figure neighborly issues across the value chainFMBAModulesSem 2NBS-M019 CORPORATE RESPONSIBILITYCourseworkcsrSlide2.JPGEconomic IssuesEconomic issues concerns over the policies and the proficient practices in doing the business. The regulation which has to be obeyed in doing the action, this issue should not trigger companys image as debased and spoiled. Figure show the key economic issues across the value chain.Figure Economic issues across the value chainFMBAModulesSem 2NBS-M019 CORPORATE RESPONSIBILITYCourseworkcsrSlide3.JPG follow of Corporate ResponsibilityCorporate responsibility practices of an organisation relies on the transparentness of the practices as presented in corporate reporting and strategy documentation. Maruti Suzuki has well fain and clear information on corporate responsibility which is published in their website and annual corporate responsibility report which are aligned to globose Reporting Initiative guidelines.FMBA ModulesSem 2NBS-M019 CORPORATE RESPONSIBILITYCourseworksbanner-1.jpgMaruti Suzukis focus has been on maturation together with its business partners. The Company is aware that in Giving confine to its business partners on issues of sustainability, it will Get back in take manifold. This will naturally translate into an opportunity for Maruti Suzuki and all its partners to Grow together sustainably (Maruthi Suzuki, 2012).TransparencyThe corporate responsibility report generally tends to have its dear(p) deeds more on it and this is why there may be a lack in transparency. This report should be prepared as per the international Global Reporting Initiative (GRI) guidelines.Based on environmental and social impact performance, Maruti Suzuki India Limited has received an overall Scientific place of 6.3, which is 26% higher than the average for all Company Ratings. Transparency link to environmental performance is 7.6 and Transparency related to social performance is 6.1 the bount iful index is in the Appendix A (GoodGuide, 2012).Corporate responsibility report can be made more reliable when there is a check and reliability check by external authority . Having more indicators to compare and asses the position of the company within the industry.Environment performanceMaruti has prodigiously brought down CO2 emission per vehicle in car manufacturing. At the Gurgaon Plant, CO2 per vehicle in 2010-11 came down by 15% compared to the previous year while in Manesar facility, CO2 emission discreditd by 13% during the year. Maruti uses Natural Gas for power generation, which further limits CO2 emission. The use of waste fuel of turbines to generate steam and compressed air also helped exploit down CO2 emission per vehicle. Maruti has registered its first Clean Development Project with the UN Framework for Climate Change (Maruthi Suzuki, 2012).In a significant initiative, a part of the hazardous waste generated at the sics is supplied to the cement industry where it is utilized for co-processing. The hazardous waste being sent includes paint sludge, orthophosphate sludge and ETP sludge. In all, 6,447 tons of such waste was sent for cycle/use in the cement industry in 2010-11, the first year of this initiative. The present landfills are also being emptied out, enabling efficient use of land within the facilities (Maruti Suzuki India Limited, 2012).The 42% of the total water requirement was met by dint of recycled and reused water in 2010-11.Figure Environmental performance in 2011Gurgaon installManesar coiffeFMBAModulesSem 2NBS-M019 CORPORATE RESPONSIBILITYCourseworks15co2.jpgReduction inCO2 emissionsFMBAModulesSem 2NBS-M019 CORPORATE RESPONSIBILITYCourseworks13co2.jpgReduction inCO2 emissionsFMBAModulesSem 2NBS-M019 CORPORATE RESPONSIBILITYCourseworks5wa.jpgless(prenominal) water usedIn manufacturingFMBAModulesSem 2NBS-M019 CORPORATE RESPONSIBILITYCourseworks16wa.jpgLess water usedIn manufacturingFMBAModulesSem 2NBS-M019 CORPORATE RESPONSIBILITYCourseworkstree.jpg25,000 Tree PlantedFMBAModulesSem 2NBS-M019 CORPORATE RESPONSIBILITYCourseworksled.jpgLED lights for streetlighting and meeting roomsFMBAModulesSem 2NBS-M019 CORPORATE RESPONSIBILITYCourseworksindex.jpg6,447 tons of waste recycle/re usedFMBAModulesSem 2NBS-M019 CORPORATE RESPONSIBILITYCourseworkslo.jpg76% of suppliers within100 kms of radiusSource (Maruti Suzuki India Limited, 2012)Environmental performance can be increased by reducing the logistic in supply chain and transporting the finished product. Recycling of the cars after its livelihood cycle, Maruti Suzuki has to do much in their environmental aspect when it is compared with the Global terms. hearty performanceMaruti Suzuki spends Rs 15.2 crore on social responsibility projects in 2010-11, an increase of 34.5 per cent over the previous year. Employee volunteers remained the impetuous force behind the Companys social syllabuss. They contributed to the highest degree 2792 volunteer ho urs, at 24 volunteering centres. Road safe is Maruti Suzukis (Q,N,C,F)* flagship national program for the society. The Company and its partners promote Road Safety by imparting driving training, awareness and advocacy (Maruthi Suzuki, 2012).The number of Maruti Driving Schools, set up and managed by its dealer partners, doubled to 166 during 2010-11. The Company also imparts driving training by and through and through Institutes of Driving Training and interrogation (IDTR), set up in union with state governments. These IDTRs trained 70,000 people during 2010-11.While working to enhance shareholder wealth, Maruti Suzuki will regularly engage with all stakeholders to assess their needs and through its products, services, conduct and management initiatives, promote their sustained growth and well-being (Maruthi Suzuki, 2012).The Company works closely with communities in four villages at Manesar. It runs education aliment centres, a computer literacy centres and vocational training programs including driving training, besides upgrading prepare infrastructure in these villages.Figure Social initiativesMaruti Suzuki is one of the best remunerative companies, with the economic and drops in sales figure it has been put in street fighter times. There have been rising issue with the management and labour in the past and in July 2011 the works broke the office in Manesar plant and set it on fire with took a life of a ranking(prenominal) executive and left hundreds injured. This issue are due to the lack of management attention , having contact workers , young and restless workers. The loss in lockout of Manesar plant was more than 1 billion rupees (India CSR, 2012).Economic PerformanceMaruti Suzuki strongly believes in sustained business growth and works towards the well being of its direct stakeholders. It makes far-reaching investment funds decisions taking into consideration unmet customer needs, market growth potential, upcoming regulations and long term su stainability of the Maruti and its assorted stakeholders (Maruthi Suzuki, 2012).Maruti Suzuki is investing over Rs. 60,000 million in new manufacturing facilities, expansion of RD infrastructure and vehicle stockyards. Maruti registered its highest ever sales of 1,271,005 vehicles in domestic and export markets in 2010-11.Companys sales in the domestic market crossed the one million vehicle milestone for the first time in with the sale of 1,132,739 units, a growth of 30.1% over the previous year.Figure Economic performanceECONOMIC DIMENSIONSACHIEVEMENTS 2009-10ACHIEVEMENTS 2010-11CHANGEDomestic Sales (nos.)870,7901,132,73930.1% merchandise Sales (nos.)147,575138,266-6.3%Total Sales (nos.)1,018,3651,271,00524.8%Net Sales (Rs. mn)289,585361,28224.75%Profit after(prenominal) Tax (Rs. mn)24,97622,886-8.3%Reserves and Surplus (Rs. mn)116,906137,23017.3%Market share (A+B+C)*44.6%44.9%0.3 % role to nationalexchequer (Rs. mn)51,44271,34338.6%Expenditure on RD (Rs. mn)1,7334,163140.2%Expen diture on CSR (Rs. mn)11315234.5%Source (Maruti Suzuki India Limited, 2012)Developing Better VisionWith rapid economic growth and investment in new capacities, skill development is critical for the country and the manufacturing sector. While this requires a concerted effort at the national aim, Maruti Suzuki is doing its bit in this area as part of its CSR program.With learning from the past Maruti has an issue which impact social dimension which in turn affects the economic dimension. With the growing awareness of environment, failing to act will bring in issues in long term.Stage 1 Maruti has its value since its launch and is said to be Indias endure , on environmental impact the have to improve their indicators. Environmental and social performance can be only ameliorate if the people who are involved are willing to bring in the process. They have ISO 140012004 Environment Management System Certificate for Gurgaon and Manesar Plants, Figure bring in the kind-hearted resour ce factor in the ISO 14001 in the stages will help in effective engagement of people.Figure Sustainability through human resource factorsFMBAModulesSem 2NBS-M019 CORPORATE RESPONSIBILITYCoursework14001.jpgSource (Bonnie Su-chun, 2001)Stage 2 Redesigning process, product and business to gain value, one of the causes for manesar Plants incident was the lack of ownership and executive decision. With the past experience the should be new process in place to debar such fatal venture. Creating new ways for improving efficiency, adding more value for the customers will be achieved only with the interest of the stakeholders. Innovation in more energy efficient cars ,Stage 3 and 4 are with the innovation and expansions of business aligning to its core business. This can be new venture dealings with the cars after their life cycle, this could bring in more value and reduce the waste.To have an effective execution of the vision there should be an integrated and systematic in the five c ritical areas.Figure VisionVisionDeveloping Corporate Responsibility StrategyThe Corporate responsibility strategy could be implemented in 3 years addition along the way.Corporate Responsibility DriversStakeholders including consumers, investors, and employees pay increasing attention to the social and environmental footprints of business and corporate-responsibility (Bhattacharya, et al., 2011). The drivers for the corporate responsibility areGrowing concern of the environment.Social wellbeing of the workers.Customers preference of products which are efficient and environmental friendlyTo improve the brand value cardinal Issues ObjectivesImproving workforce management by collaborating with the associations and satisfy the genuine needs of labours.Improving executive task ownership and responsibility through having a structure.Improving community through topical anaesthetic hiring, working with NGOs to run education and health camps.Educating good driving habits through Road Safet y Initiatives and Maruti Driving Schools.Compiling with governing body and presidency for environmental impact assessments, social impact assessments and internal management systems.Research and development on bring out more efficient vehicles.Targets and Key Performance IndicatorsTraining 3,00,000 people on Safe driving.Opening 50 more Maruti Driving Schools.Reducing CO2, electricity and water consumption by 3 % per vehicle in both the manufacturing plants.Improve workforce welfare, avoid strikes.To have 75% of suppliers with ISO 14001 certification.Reducing packaging material by 5 % and using bio degradable packaging material.Reducing employee injury rate by 10 %.Governance Stakeholder EngagementMaruti has a well-structured organization with good communication enthral to perform.Figure Corporate governance structureFMBAModulesSem 2NBS-M019 CORPORATE RESPONSIBILITYCourseworkcorprategor.jpgSource (Maruthi Suzuki, 2012)To have an effective Corporate Responsibility there should b e good engagement across all levels with the understanding about it. The get along of directors who explore into the whole CR function and discuss with the committees for prioritising the issues and key activities. These committees are incompatible for economic, social and environment they are responsible for the distributing the roles and responsibility to the staffs , achieving targets and reporting to the lineup of directors. Control and audit looks into the performance of staffs, changes in the global stage and benchmarking.Figure Governance, Accountability and Reporting StructureRemuneration of executive and employees for achieving their targets will propel them to carry on the good work.The Stakeholder engagement can be improved by does the activities in Figure Stakeholder engagement activitiesFigure Stakeholder engagement activitiesStakeholder actShareholders and InvestorsAnnual General MeetingInvestor MeetsSuppliersProduct MeetingJoint impale HR MeetingDealersBalanced Score CardDealer conventionZone MeetingSocialMeetings with CommunityNGOs meetingEnvironment regulative AuthoritiesCommunity FeedbackManagement SystemsThe process of managing the sustainability should be headed by the Board of directors having the knowledge of the prioritise issues and key activities. Management communities get in the views and concerns from various elements, they then asses the importance and benefit of performing the action on it. The also look in for possible risk which will affect them. These are taken into account in the planning stage itself. Environmental , social and economic impacts should be open to scrutiny by government authorization , independent regulatory bodies and other firm in order to have a transparency and increasing the confidence of the reliability in the performance figures. The risk management activity is reviewed by the Audit perpetration through a management subcommittee, namely the Executive Risk Management Committee. It reviews risk ma nagement activities on a regular basis, in addition to see for emerging risks.EconomicSocialExecutive Risk Management CommitteeBoard Of DirectorsAssessment by Authorities and outside firmsEnvironmentalStakeholder Concerns, handicraft Impacts, Risks And OpportunitiesManagement CommitteeAdapted (Maruthi Suzuki, 2012)RiskRisk is caused both from internally driven and externally driven.Figure Maruti RiskEconomic RisksEnvironmental Risks positive financial failureLabour StrikeCompetitorEconomy retardantCarbon PositioningFlood and Land SlidesPlastic waste quakeLand and water use managementGeopolitical RisksSocietal RisksGovernment ChangesNew policies and regulationsWater supply crisesPower supply crisesFire and SafetyReputationTechnological RisksFailure of IT systemCyber attack and Data seclusionConclusionMaruti corporate responsibility is performing good at the moment when compared to its competitor in the domestic region. The major issue in the social are the labour unrest. With t he improved vision the company will bring in more value. The process is improved with implying human resources factors and managing the at all levels. Transparency is gained by allowing the external firms and authorities to scrutiny. The new corporate responsibility strategy is aligned to the existing activities and issue. Stretching the environmental performance figures will gain brand value and compete with the international industry level .BibliographyBhattacharya, C., Danie, l. K. Sankar, S., 2011. What really drives value in corporate responsibility?. Online available at http//www.mckinseyquarterly.com/What_really_drives_value_in_corporate_responsibility_2895Accessed 11 12 2012.Bonnie, F. D. Su-chun, H., 2001. Achieving sustainability through attention to human resource. International daybook of Operations Production Management, 22(12), pp. 1539 1552.European Commission, 2006. 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