Tata Motors and Social Responsibility

This assignment delves into Tata Motors' commitment to social responsibility, analyzing their practices through the lens of prominent theories. It compares their approach to both classical and socioeconomic views of corporate social responsibility, concluding that Tata Motors aligns more with a contemporary perspective. The ethical implications of their actions are examined using Kantian ethics as a framework. Additionally, the essay conducts a stakeholder analysis to identify potential conflicts arising from their social responsibility initiatives.

Running head: MANAGEMENT THEORY AND PRACTICES
Management theory and practices
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Introduction
In the current business scenario, business organizations should also look after the social
welfare also apart from their core business objective of profit maximization. This is due to the
reason that, the current business scenario is much more competitive in nature with the presence
of number of players in the same sectors. Thus, in order to maintain and enhance the goodwill
and reputation and to stray ahead in the competition, it is important for the business
organizations to initiate the process of corporate social responsibility (Blomqvist, 2014). This
refers to the process of allocation of corporate fund for the wellbeing of the society. In the recent
times, more contemporary business organizations are initiating activities related to the corporate
social responsibilities (Zellweger et al., 2013).
Tata is one of the leading conglomerates in the world with their operational facilities
present in different locations around the world. They are based in India and have their presence
in automobile sector, FMCG sector, fashion sector and steel industries (Tatamotors.com, 2018).
This essay will only discuss about the automobile division of Tata or Tata motors. They are
known for their preference for humane approach over commercial approach. In accordance to
that, Tata motors follow extensive approach of corporate social responsibilities (Tatamotors.com,
2018). This essay will critically analyze the theories of social responsibility from the perspective
of Tata motors. Moreover, different management theories will also be discussed for the critical
analysis.
Corporate social responsibility of the Tata motors
Activities related to corporate social responsibility of Tata motors covers different areas
ranging from health, education and skill development to environment welfare and community

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development. One of the key social activities in the health sector is setting up of community
hospital in Jamshedpur, India along with activities in different locations. However, there are
various implications on their business operation due to these activities. One of the key aspects
that should be considered is the stakeholder analysis (Costa & Menichini, 2013). This is due to
the reason that, an organization will have different stakeholders with different interest and they
will have diverse perception in view to the corporate social responsibilities. The interest between
the customer and management of the organization will be conflicting due to the reason that, the
objective of the customers will be to have more value creation from the organization. On the
other hand, the objective of the upper level management will be to maximize profit by reducing
the unwanted cost.
Thus, with the initiation of the social activities, the reputation of the organization will get
enhanced in the market. Customers will have more satisfaction by consuming their products. On
the other hand, initiation of the corporate social responsibility will reduce the profit
maximization for the upper level management. This is due to the reason that, corporate social
responsibility will incur cost from the corporate fund without having any short term or
materialistic profit (O’Riordan & Fairbrass, 2014). Thus, it is being considered as an extra cost
for the organization by the upper level management. This led to the generation of conflict
between the key stakeholders including the customers and the management.
Theories of social responsibility
There are various theories being stated by different authors regarding the social
responsibility. However, two are the most important theories being used in the mainstream
business scenario. Classical view of the social responsibility is one of them (Frynas & Stephens,

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2015). This theory is being stated by Milton Friedman. According to this theory, the first priority
for any business organizations should be the profit and business maximization rather than
concentrating on welfare of the society. He also stated that, initiation of the corporate social
responsibility lead to the unwanted cost for the company along with taking extra responsibility.
This theory states that, the responsibility of community development is with the government and
not with the business organizations (Crane & Matten & Spence, 2013). Thus, in the case of Tata
motors, initiation of different initiatives in different sectors causing more cost for them. As of
2016, Tata motors have spent more than 205.70 INR for the activities related to corporate social
responsibility. In addition, this cost is not having any benefits for them in terms of increase in
profit or revenue. This is due to the reason that, social activities are mainly being promoted for
the bottom of the pyramid society and they are not the target customers for Tata motors. Thus,
according to this theory, Tata motors should concentrate more on their core business activities
over their existing social activities.
The second theory is the socioeconomic view of social responsibility. According to this
theory, social wellbeing initiatives by the organizations are as important as their core business
objective for profit maximization (Huang et al., 2014). This is due to the reason that, this theory
states contemporary business organizations are not only seen as economic establishment, rather
than they are being considered as an institution, which will have influence in the surroundings
and in the society. Thus, this theory promotes that the contemporary business organizations
should initiate different social activities. In the case of the Tata motors, this theory is can get
more effectively aligned due to the reason that, the business approach of the Tata motors matches
with the socioeconomic theory of social responsibility.

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Due to the extensive social activities being practiced by Tata motors, the social image of
them is being enhanced along with their brand identity effectively penetrated in the market. in
the South Asian region, the brand of Tata motors is being considered as reliable and authentic.
This is being made possible with the social activities that they maintain. Moreover, according to
the socioeconomic theory, business organizations are not only for economic benefits, rather they
should also engage in social welfare (Kolk, 2016). In accordance to that, Tata motors allocate a
portion of their revenue for the social welfare. This helps them to have positive brand image in
the market, which eventually helps them to push their products in the market effectively.
Critical analysis through ethical theories
According to the theory of Kantianism, the principles behind the actions should be right
and should be considered in ethical way no matter what the result will be. Thus, the principles
will be considered as ethical even if the output is not effective. In the case of the Tata motors,
even if the output of their corporate social activities is not positive or effective, then also their
initiatives will be considered as ethical (Segal & Lehrer, 2013). This is due to the reason that, the
investment that Tata motors have made in different sectors will have positive impact on the
community and the society. Thus, according to the theory of Kantian ethics, the corporate social
responsibilities of Tata motors can be considered as ethical.
Limitations of the theories of corporate social responsibilities
The classical view of social responsibilities is having various limitations, which are being
identified. One of the key limitations is the lack of concentration on the social cause. According
to this theory, business organizations should only look after their core business activities rather
than doing social welfare. However, in the current business scenario, business organizations

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should also keep in mind their goodwill and reputation, which are not being stated in the theory.
Thus, this theory does not adhere to the contemporary business scenario (Fooks et al., 2013).
Another limitation identified is the lack of any details of the ideal approach of social
responsibility. This is due to the fact that, according to this theory, business organizations should
not promote social responsibilities. Thus, this theory is not stating any form or approach of social
responsibility for the business organizations.
On the other hand, socioeconomic view of the social responsibility is also having
multiple limitations being identified. One of the key limitations being identified is having no
clear idea about how to recover the cost incurred in initiating the social activities. This theory
stated that, business organizations should promote social activities for the welfare of the society.
However, it does not state the way of earning the revenue for these activities. Another limitation
being identified is the negative implication of the social initiatives of the business organizations.
This is due to the reason that, there may have negative implications for the particular social
activity being initiated by the organizations. However, in this theory it is not being stated about
how to mitigate these implications.
Conclusion
Thus, from the above discussion, it can be concluded that, Tata motors follows extensive
approach of corporate social responsibilities in their business operation. This essay discussed
about the approach of social responsibilities being followed by Tata motors with the help of two
of the most popular theories of social responsibilities. It is being concluded that, approach of
social responsibility of Tata motors is more aligned with the socioeconomic view theory
compared to the classical view. Thus, Tata motors follow the contemporary approach rather than

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the old school approach. The social activities of them are also being critically analyzed with the
help of ethical theories. It is being seen that, the approach of the Tata motors in view of their
social responsibilities is ethical from the view of Kantian ethics. Stakeholder analysis is also
being initiated in this essay in order to identify the conflict between different stakeholders.

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Reference
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