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Corporate Social Responsibility:

Multinational Corporations’ Initiatives and

their Impact on the Quality of Life of Local Communities.

A Study of the Indian Automotive Industry.

11/08/2016

Ursula Beatrice Hessenauer

S2995875

Though the concept of Corporate Social Responsibility (CSR) is vastly discussed in management literature little is known about its relation with community development at the local level. This paper makes an attempt to shed light on the current landscape of CSR activities within the automotive industry in India. Based on a multiple case study analysis comprising three foreign and two Indian MNCs a matrix of distinct CSR dimensions has been developed to detect high impact activities for improving living conditions of the local people. Findings suggest that health and education are preferred CSR areas and that large-scale projects are mainly conjoint programmes of MNC and NGO. While education and vocational training are the two areas with the most promising impact there is still a strong need to implement a strategic impact measurement of CSR engagement on the part of MNCs. The study concludes with five propositions which should lay thefoundation for a future empirical research project including further types of industries.

Master’s Thesis as Part of the MSc International Business and Management University of Groningen

Faculty of Economics and Business, Department of Global Economics and Management First Supervisor: Dr. Bartjan J.W. Pennink

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ACKNOWLEDGEMENT

The author would like to express her sincere appreciation to the thesis’ supervisor Dr. Bartjan J. W. Pennink for his guidance throughout the entire project, the inspiring debates about numerous CSR perspectives with respect to local communities in emerging markets, and his understanding of the author’s challenges in data collection. The author is especially grateful that Dr. Pennink consistently allowed her to choose her preferred focal region and industry and hence acknowledged this study to be her own work.

Furthermore, the author would like to thank Mr. Anurag Rathi for entrusting her with strictly confidential business contacts which led to a small breakthrough in approaching appropriate personnel. Without this contribution, a collection of primary data would not have been possible at all.

The author hereby acknowledges the following individuals for their responses and for providing first insights into their employers’ CSR activities: Mr. Sohanjeet Randhawa, Ms. Gauri Rajadhyaksha, Ms. Mehta Sheetal, Mr. Shekhar Das Chowdhury, and one anonymous person.

Finally, the author would like to extend her deepest gratitude to her family for their continual support and encouragement during the postgraduate studies in International Business and Management at the University of Groningen and through the process of researching and writing this thesis.

Author

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Table of Contents

1. Introduction ... 5

2. Corporate Social Responsibility ... 8

2.1 Defining Corporate Social Responsibility ... 8

2.2 General Corporate Social Responsibility Models ... 9

2.3 Indian Corporate Social Responsibility Perspectives ... 11

3. The Importance of Corporate Social Responsibility ... 12

3.1 Legal Requirements in India ... 12

3.2 Local Communities ... 15

3.2.1 The Bottom of the Pyramid ... 15

3.2.2 The Quality of Life ... 16

4. The Implementation of Corporate Social Responsibility ... 17

4.1 Corporate Social Responsibility as a Business Strategy ... 17

4.2 The Role of Local Stakeholders ... 18

4.3 Shared Value Approach ... 19

5. Impact Measurement of CSR Activities ... 20

6. Methodology ... 23

7. Analysis ... 27

7.1 Case: Mercedes-Benz India ... 27

7.2 Case: Volvo India ... 29

7.3 Case: Western Manufacturer... 31

7.4 Case: Mahindra & Mahindra ... 32

7.5 Case: Tata Motors India ... 37

7.6 Cross-Case Analysis ... 39

7.7 Cross-Validation – Empirical Studies ... 44

8. Conclusion ... 45

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Appendix ... 51

Notes ... 51

Figures ... 59

References ... 63

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1. Introduction

With the global market being more accessible for multinational corporations (hereafter MNCs) triggered by e.g. foreign direct investment (hereafter FDI) encouragements on the part of national governments, and the decline of trade barriers, it provides new growth potential on a global scale. Especially emerging markets offer a tremendous demand propelled by their continuously increasing middle class with a higher purchasing power, and by their shift in consumer buying habits (Tiwari & Herstatt, 2014). In order to leverage the opportunities offered by emerging markets, many MNCs enter these countries through FDI and establish wholly owned subsidiaries (hereafter WOS) there.

While exploiting the potential of these vast new markets, including e.g. access to inexpensive resources, MNCs face rising demands for on-site social responsibility from both governments and customers. The purpose is to demonstrate accountability to the society in whose vicinity MNCs undertake business actions. This trend is even amplified by introducing a compulsory Corporate Social Responsibility (hereafter CSR) engagement in the legislation as occurred in India in 2013. According to ‘The Companies Act, 2013’ (Ministry of Law and Justice, India, 2013), businesses exceeding net profits of INR 50 million during any financial year are not only expected to create a CSR committee but also to execute CSR activities to the minimum amount of 2% of their average net profits of preceding financial years. This regulation does affect both at least 6,000 Indian companies and all major MNCs (PwC, 2013). Historically understood as philanthropy, CSR is said to have more strategic importance in India nowadays (Agarwal, 2008, PwC, 2013).

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Within this context, the study focuses on India’s automotive industry due to the following reasons: Almost half of India’s manufacturing gross domestic product is generated by the automotive industry providing labour to almost 20 million people. Further, India is expected to rank third among the largest automobile markets by the end of the current financial year (Make in India, 2014), revealing the industry’s dominant position. Following figure 2, an expansion of foreign MNCs’ presence in India with respect to the automotive industry is not only expected but already has begun.3 On one hand foreign MNCs face stringent CSR requirements when entering the Indian market in the form of a WOS, on the other hand a high level of CSR engagement might boost a company’s image, something indispensable when dealing with a gigantic market like India. Besides having a latent morale imperative owing to a MNC’s global reputation, the author anticipates that the automotive sector encounters certain market and customer peculiarities which might affect the buying decision and consequently a MNC’s performance. For instance, a passenger car is, as opposed to a usual fast moving consumer good (hereafter FMCG), a luxury product and its prospective owner might attach importance to the manufacturer’s business ethics to a higher degree than to those of a FMCG producer, raising additional expectations for social responsibility.

Since the aforementioned concept of CSR is vastly discussed in theory but hardly provides insight into both its execution and relation with community development at the local level, neither in general nor with respect to India, this study is of great significance. Targeting strategic decision-makers in business and policy-makers within Indian authorities, this research project claims to be of rather practicable nature. By conducting this analysis, the author aims at identifying not only the current landscape of performed CSR activities within the Indian automotive industry but also the most promising CSR projects for improving given living conditions of the local people. Focusing on India as the starting point enabling the derivation of suitable propositions and a conceptual model should lay the foundations for future testing. The latter should not only comprise India but also other emerging market countries to increase generalisability. Hence, the following research question can be derived as centre of this study:

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This study is categorised under the overall framework ‘multi-level multi actor model of local economic development’ (Pennink, 2014). More precisely, it focuses on the model’s local level with respect to the community which is highlighted in figure 3. Though it generally is acknowledged that local stakeholders are interconnected when it comes to achieving local economic development (Pennink, 2014), it has yet to be understood how and to which extent MNCs’ CSR activities contribute to a better quality of life of the local communities.

The study’s structure follows a conventional top-down approach, commencing with the big picture of CSR and leading to the targeted individual or community at the local level, as outlined in figure 4 below. Generally speaking, the framework deals with the following subsequent questions: What is CSR? Why is CSR considered to be important, especially in the Indian context? How can CSR be performed and operationalised? And what is the outcome of such CSR initiatives with respect to the quality of life of the local people?

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Source: Proprietary illustration

First, chapter 2 introduces the term CSR by discussing various definitions and presenting general conceptual models while distinguishing them from Indian CSR perspectives. Second, chapter 3 attempts to elucidate the reasons for the existence of CSR in India. Here, not only legal CSR requirements MNCs are bounded to are described but also local communities with their particular needs and the corresponding concept ‘quality of life’. Third, the implementation of CSR is scrutinised. Thus, chapter 4 considers CSR as a business strategy, examines the role of various local stakeholders, and sheds some light on its operationalisation with respect to preferred CSR sectors. The theoretical part of the present paper concludes with a selection of appropriate impact measurement of CSR activities.

The methodology applied is of qualitative nature by analysing both secondary data (published CSR policies and specific initiatives accessible on company websites) and primary data (through a few individual e-mails with employees in charge) of automobile manufacturers in India, including Western as well as Indian MNCs. Received details on MNCs’ CSR practices should allow the derivation of distinct CSR patterns of automotive companies and, in the second step, be compared to each other. The anticipated findings should have the potential to review prevailing CSR practices performed by individual companies. Finally, it is expected to state propositions which might be the object of a future empirical study.

2. Corporate Social Responsibility

Despite a burgeoning research and the establishment of management principles within recent years, CSR is not a brand new phenomenon. The resulting paragraphs aspire to define and conceptualise the term CSR. First, various definitions are presented, followed by a selection of general CSR models. The third paragraph will shed some light on CSR perspectives that evolved in India in the course of time, before this section will conclude with a short summary.

2.1 Defining Corporate Social Responsibility

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following societal values blindfold (Bowen, 2013). During succeeding decades, the CSR debate experienced several waves of definitions including a focus on the interlinkages between corporations and societies, the presentation of a fourfold (i.e. economic, legal, ethical, and philanthropic) CSR concept, and the introduction of the stakeholder perspective (Moratis, 2016), as will be further discussed in the next section. Initially conceptualised as corporate philanthropy solely, CSR is nowadays understood as a multi-faceted concept considering an organisation’s decisions and their effect on both stakeholders and the environment (Muniapan, 2014, Torrecchia, 2015). According to Agarwal (2008) and the concept of ‘Triple Bottom Line’ businesses entail not only economic performance but also should pursue activities promoting the environment and society in order to abate the negative impacts of its business undertakings. In a nutshell, corporations are expected to consider financial, ecological, and social issues as part of their performance assessment (Agarwal, 2008). A rather simple definition, yet right to the point, is stated by the European Commission by characterising CSR as “the responsibilities of enterprises for their impacts on society” (European Commission, 2011, p.6). Issued in 2010, one of the latest approaches in providing a detailed CSR explanation is certainly the globally accepted and broadly implemented ISO 26000 standard. The 6th clause’s core social responsibility subjects, viz. organisational governance, human rights, labour practices, environment, fair operating prices, consumer issues, and community involvement and development, constitute more than 50% of the standard (Hahn, 2013). Not only does this standard neglect an economic perspective on CSR but also does it ignore the concept’s voluntary nature, however, it allows for recommendations on performed CSR by even providing best practices (Moratis, 2016, Hahn, 2013).

2.2 General Corporate Social Responsibility Models

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additional information on stakeholder inputs and their rewards please refer to Halal (1987). One of the most prominent models is Carroll’s pyramid of corporate social responsibility which is briefly outlined in the following. Understood as a framework to depict a company’s responsibility to society, it entails four elements of CSR which should not be regarded in isolation but rather seen as interconnected (Carroll, 1991). First, as portrayed in figure 5 below, a firm’s utmost priority is profitability which is the prerequisite to all succeeding responsibilities. This is followed by the layer of ‘legality’ demanding obedience to the law and adherence to fundamental societal rules when doing business. Third, the ‘ethics’ layer expects, among other traits, fairness and the prevention of bad impacts on employees, customers, the environment, and the community. Last but not least, the pyramid’s top layer represents a firm’s active engagement in community development. Though characterised by monetary and non-monetary contributions to charitable programmes as per community request, this philanthropic duty is still of voluntary nature (Carroll, 1991). Consequently, the topmost layer comes as close as possible to the study’s research question. Carroll (1991, p.43) concludes that a company’s CSR engagement should embrace “[…] the simultaneous fulfilment of the firm’s economic, legal, ethical, and philanthropic responsibilities”.

Figure 5: The Pyramid of Corporate Social Responsibility

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By studying 37 CSR definitions Dahlsrud (2008) was able to develop five core dimensions, namely the environmental, social, economic, stakeholder, and voluntariness one. Following Almunawar & Low (2014, p.177), “CSR means running a business that fulfils economic, legal, ethical, philanthropic and environmental responsibilities”, hence, i.e. due to the latter, exceeding Carroll’s model. One of the latest theories in the evolution of CSR is the shared value approach as developed by Porter & Kramer (2011, 2006) which implicates interdependent firm and community and a long-term win-win situation. In terms of CSR, it is anticipated that this model disapproves the mere donation of financial means but rather fosters the implementation of sustainable philanthropy (Forbes India, 2015). The concept of shared value is taken up again in section 4.3.

Apart from the diversity of similar CSR definitions there exist numerous concepts related to CSR, such as the country-oriented Sustainable Development (SD) or the firm-oriented but broader Corporate Sustainability (CD). Since presenting a strict CSR definition or the one and only CSR model is highly challenging (Almunawar & Low, 2014), this paper does not claim to deliver a full-fledged description either.

As CSR is influenced by the country’s predominant culture and Western CSR practices are not expected to be universally applicable (Muniapan, 2014), CSR should now be scrutinised from an Indian perspective.

2.3 Indian Corporate Social Responsibility Perspectives

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Nehruvian (i.e. derived from former Prime Minister Jawahar Lal Nehru) model should be mentioned which regulated CSR through state ownership and legal obligations in the second half of the 20th century. The third model is the liberal (Friedman) model, also known as shareholder perspective, suggesting that CSR is controlled by private owners. This was due to huge waves of privatisation and deregulation as represented by the late 20th century. Last but not least, the stakeholder perspective, also known as the Freeman model, found its way into India in the1990s which was in alignment with global CSR trends. Here, “[…] CSR evolved as corporate strategy which is closely related to core business” (Bhaduri & Selarka, 2016, p.47). Organisations started to take action in favour of their, among other stakeholders, employees and communities in response to enacted Western standards as a result of a high degree of outsourced manufacturing to India (Arevalo & Aravind, 2011, Gautam & Singh, 2010, Bhaduri & Selarka, 2016). Nowadays, CSR in India is more and more seen as a competition by evaluating individuals on their share of wealth spent on society as acknowledged by Mr. Anand Mahindra, Chairman and Managing Director of Mahindra Group (Forbes India, 2015).

Having attempted to conceptualise CSR by presenting a variety of definitions and models in both general and Indian context, the urgency and importance of CSR for India should now be further elaborated on.

3. The Importance of Corporate Social Responsibility

Though myriads of reasons make a CSR engagement necessary, like consumer or NGO driven requests or a firm’s (competitive) strategy, merely the Indian legal requirements are considered and presented below. This is followed by the term ‘local communities’ with its underlying theories ‘bottom of the pyramid’ and ‘quality of life’.

3.1 Legal Requirements in India

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The Companies Act 2013

Businesses meeting one or more of the following requirements during any financial year are obliged to create a CSR committee consisting of at least three directors out of which minimum one should be an independent director:

- Net worth of INR 500 crore (hereafter cr) or more - Turnover of INR 1,000 cr or more

- Net profit of INR 5 cr or more

Among other responsibilities, the committee has to formulate and recommend to the Board a CSR policy specifying the CSR projects to be performed by the company. According to Schedule VII of the Companies Act, 2013, these can be activities concerning: e.g. eradicating extreme hunger and poverty, promoting education, promoting gender equality and empowering women, reducing child mortality and improving maternal health, ensuring environmental sustainability, employment enhancing vocational skills, or a contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government or the State Governments for purposes as specified under section 135. Apart from that, the committee should recommend the required amount of CSR spending and check the firm’s CSR policy regularly. As far as the company board is concerned it has to guarantee that in every financial year at least 2% of the average net profits (i.e. generated during the three preceding financial years) are spent in accordance with the company’s CSR policy. Not only are businesses expected to prioritise the region near to its operating premises for their CSR activities but they also are obliged to justify and explain themselves if they don’t fulfil the 2% rule. Bhaduri & Selarka (2016) point out that these guidelines apply to both companies of Indian origin and foreign companies (e.g. a WOS) that are registered and incorporated in India. [For the Companies Act, 2013 complete and original wording, please refer to the Ministry of Law and Justice, India (2013).]

Business Responsibility Reports

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Besides general recommendations for the report’s format, the Securities and Exchange Board of India (2015) has issued a framework of 9 principles with corresponding questions to be answered by the respective companies of which principle 4 (identifying internal/external and marginalised stakeholders) and principle 8 (addressing details of the CSR programmes’ execution and their aftermath) serve the purpose of this study. Depending on their market capitalisation at the end of every financial year, this obligation is applied to the top 500 listed corporations in India since late 2015 (The Times of India, 2015).

The National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business

Targeting all kinds of companies doing business in India, these guidelines provide a well-structured and comprehensible manual to implement sustainable business undertakings. Consisting of the aforementioned nine principles, the Ministry of Corporate Affairs (2011) further provides their related core elements which can be regarded as a principle’s explanation or recommended courses of action in order to successfully apply the respective principle. The ministry expects from companies the adoption of the ‘triple bottom line’ approach and an outperforming of the principles’ minimum requirements. For illustration purposes, the 3rd core element of principle 4 reads “Businesses should give special attention to stakeholders in areas that are underdeveloped” while the first core element of principle 8 says “Businesses should understand their impact on social and economic development, and respond through appropriate action to minimise the negative impacts” (the Ministry of Corporate Affairs, 2011, p. 13 and p. 22 respectively). Besides, corporations are counselled on how to integrate the principles and core elements into their business processes, followed by appropriate indicators for monitoring and evaluation before the manual concludes with a reporting framework suitable to inform a firm’s stakeholders Ministry of Corporate Affairs (2011).

Despite the positive purpose of legal requirements like inclusive and sustainable development, improved reputation and competitive advantage, there are arguments that speak against such requirements, for instance by constraints negatively affecting the exporting industry in a disproportionate way (Das Gupta, 2014).

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3.2 Local Communities

When talking about communities, first a proper definition is required. The simplest definition perceives a community as a social unit of individuals with mutual values which is likely to exceed the size of a small village (Low & Ang, 2015). Following PwC (2013, p.28), “a community can be defined as a homogenous group of individuals bound together geographically, politically, culturally or by certain values, principles, or shared characteristics“ or as “[…] the collection of stakeholders who reside in the local vicinity of company operations and who rely on or are impacted by its shared resources.” More and more corporations aspire to demonstrate the advantages which the communities gain from the firm’s existence while Esteves & Vanclay (2009) acknowledge a local community’s precious inputs in form of natural, physical or social qualities. Kapelus (2002) admits that even the classification of a community is a challenging undertaking. Though a community can be easily determined based on common land or values, it might occur that individuals have allotted multiple identities or show dynamic ones, which does not permit depicting the actual situation of the targeted individuals (Kapelus (2002).

When MNCs or local authorities talk about CSR programmes benefiting the local communities, they usually imply underprivileged, vulnerable or marginalised groups. According to the Ministry of Corporate Affairs (2011, p. 47) these are characterised as “groups of individuals who are unable to realize their rights or enjoy opportunities due to adverse physical, mental, social, economic, cultural, political, geographic or health circumstances”. As this study covers India, it seems legitimate to regard the following people, among others, as belonging to this type of community group: (female) children, women, handicapped people, scheduled tribes and castes, and migrants.

Having identified the local community, the next logical step would then be to evaluate the community’s importance and to determine its needs.

3.2.1 The Bottom of the Pyramid

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products’ affordable prices, that they are in reach for the BoP, and that they meet their peculiar and multifaceted needs (Payaud, 2014). Since the automotive industry (including premium car manufacturers) form the basis of this study (i.e. expensive luxurious products), the BoP seems to be less relevant to product changes or MNCs’ profits. However, Seelos & Mair (2007) suggest MNCs to collaborate with entrepreneurial groups that lack capacities and help overcome those so that they can perform their BoP business models. Such entrepreneurs could consider generating economic as well as non-economic value for the community (Karnani, 2007). In return, MNCs will improve their reputation, are trusted, and might be offered the group’s resources and experience at the BoP which can benefit MNCs to gain a foothold in an unknown market (Seelos & Mair, 2007).

All in all, approaching these new market opportunities requires not only the MNCs’ patience but also willingness and open-mindedness to overcome cultural, institutional, political, technological, and environmental differences in order to create long-term sustainable economic development in the region they are operating in.

3.2.2 The Quality of Life

By supporting the local communities, MNCs aim at improving their quality of life. According to Collins Dictionary (2016), this concept refers to “the general well-being of a person or society, defined in terms of health and happiness, rather than wealth.” Though there is no single definition for this concept, it comprises multiple indicators affecting the quality of life. Examples are improved physical health, access to clean water, increased community safety, and higher independence (Corporate Citizenship, 2014). The ‘quality of life’ can be even regarded as firmly established in article 25 of the Universal Declaration of Human Rights (UDHR, 1948), however not explicitly mentioned: “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services […]”. Instead of just simply creating employment for the poor, Karnani (2007) demands to improve both their abilities and freedoms with regard to society, culture, and politics, which amplifies the employability and output of the deprived.

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4. The Implementation of Corporate Social Responsibility

Having dealt with the What? and Why? dimension of CSR, this section addresses the How? by introducing CSR as a business strategy, a MNC’s relation with local stakeholders, and by concluding with the shared value approach as a way to achieve sustainability in the country the MNC is operating in.

4.1 Corporate Social Responsibility as a Business Strategy

As far as the operationalisation of CSR is concerned, PwC (2013) suggests an eight-stage process to successfully strategize and implement CSR activities, ranging from developing a CSR policy to choosing an adequate partner NGO and measuring the impact of the performed CSR activity. This is confirmed by Ms. Sheetal, Head of CSR, who describes Mahindra & Mahindra Ltd.’s CSR implementation procedure as “run it efficiently, measure the impact, and scale it up […]” (Forbes India, 2015). Besides adhering to legal obligations as presented in section 3.1, a MNC’s top management team should solidify their CSR commitment, infecting all subjacent management levels with it. This top-down approach is well exemplified by the aforementioned Mahindra & Mahindra; one of India’s outperforming companies in terms of CSR spending. The company strategizes its CSR engagement at top management level which is mainly spearheaded by Mr. Anand Mahindra, the firm’s managing director (Forbes India, 2015).

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A plethora of guiding principles and reporting frameworks on CSR are available to ensure MNCs’ successful adoption of economic, social and environmental standards, for the purpose of sustainability. For example the UN Global Compact self-assessment tool serves as a handbook for all types of businesses comprising 45 questions with several corresponding indicators per question, covering the five tabs of ‘management’, ‘human rights’, ‘labour’, ‘environment’, and ‘anti-corruption’ (Bhaduri & Selarka, 2016). The tool not only serves as a manual but also allows tracking a firm’s current penetration rate regarding the aforesaid standards. Other recommendations are the OECD Guidelines for Multinational Enterprises which aim at MNC business undertakings that comply with social and environmental responsibilities. By offering a suitable communication strategy and a roadmap indicating relevant duties and tasks on the part of MNCs, these guidelines make it more likely that they make a major contribution to the local community (OECD, 2001, Bhaduri & Selarka, 2016). Besides, reporting frameworks like the Global Reporting Initiative (by non-profit association GRI) and the Business Responsibility Reporting Framework (by Ministry of Corporate Affairs, India) ensure that businesses keep sufficient data ready at hand to prove the guidelines’ implementation in front of their stakeholders (Ministry of Corporate Affairs, 2011).

Finally, in order to guarantee a successful community engagement, MNCs should do both embed them in the MNC’s strategizing and practice proper community participation through encouraging the communities to recognize their needs and set their own goals (PwC, 2013).

When studying further literature on CSR strategy and its execution, a few questions immediately come to mind MNCs face with regard to CSR. Whom are we targeting with our CSR initiative? What is the radius/geographical distance of our CSR project? Can we execute the activities ourselves or should we partner with a NGO?

4.2 The Role of Local Stakeholders

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the numerous business connections. Exceeding the requirements of this so-called bicycle spoke model, it is further expected from companies to fund communal facilities like roads or hospitals as part of their business ethics with benefits for both the MNC and the community or the individual (Almunawar & Low, 2014).

To improve their sustainability performance, Das Gupta (2014) recommends corporations to join networks with local stakeholders including governments and NGOs with all stakeholders mutually benefiting and enhancing their competencies.

When reconsidering the issue of stakeholders, the following question arises: When performing CSR activities in conjunction with a NGO, who is the driving force (i.e. project leader) or are the programme’s contributions equally distributed between the partnering organisations?

4.3

Shared Value

Approach

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Though the concept of shared value creation represents a win-win situation for both corporations and the community in which they are embedded (Porter & Kramer, 2006), it also provokes some clear challenges MNCs have to deal with. An ongoing commitment is not only time-consuming but it also requires local knowledge, viz. knowledge of the needs at the BoP. MNCs either have to acquire this peculiar local market knowledge of disadvantaged groups or rely on the cooperation with a competent local partner. Not only in this context but also with regard to the collaboration with local suppliers, the building of trust is absolutely essential in order to maintain good business relations, regular interactions, and the exchange of confidential information (Gereffi et al., 2005).

Despite the concept’s social character, Porter & Kramer (2011) demand its recognition as a proper means to boost productivity and competitive advantage, leading to invaluable best practices, and embedding the management of shared value within a MNC’s strategy since “[the] opportunity to create economic value through creating societal value will be one of the most powerful forces driving growth in the global economy” (Porter & Kramer, 2011, p.15).

So far, the study has focused on issues leading to an execution of CSR activities in emerging markets; yet, the initiatives’ success and its quantification has to be regarded as well.

5. Impact Measurement of CSR Activities

Since this section is regarded from a broader and not necessarily from a company perspective, it should not be compiled as a sub-section of ‘The Implementation of CSR’ but as a separate chapter instead.

Social Impact Assessment

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practicable nature. In order to add further value to this section, two widely used impact measurement frameworks are chosen and briefly introduced below.

Social Return on Investment

The Social Return on Investment (hereafter SROI) is one of the first frameworks developed to measure “[…] the value of a company’s impact on people and the environment” (Lingane & Olsen, 2004). Following theories on cost-benefit analysis, financial means are allocated to social revenues determining the SROI as the relation of the social benefits’ net present value to net present value of invested money needed to generate these benefits (Millar & Hall, 2013). Lingane & Olsen (2004) stress that the latter does not consider financial return to investors since it would not serve the measurement’s purpose and is covered by the return on investment analysis (ROI) instead. They further suggest 10 guidelines for an appropriate SROI process framework including issues such as including positive and negative impacts, considering “impacts made by and on all stakeholders […]” (Lingane & Olsen, 2004, p. 122), and including impacts that can be allocated to the firm’s initiatives undoubtedly. Millar & Hall (2013) also acknowledge the SROI’s consideration of a company’s complete list of stakeholders and indicate that the SROI is globally accepted as an evaluation tool for social enterprises.

The London Benchmarking Group Model

For the purpose of a more practical impact assessment, the London Benchmarking Group model measurement framework (hereafter LBG) provides a decent tool (Corporate Citizenship, 2014). Actually regarding corporate community investment which necessarily has to fulfil both requirements, voluntarism and the cooperation with charitable organisations or initiatives, it still seems useful to apply it to usual CSR projects within local communities. “[…] widely regarded as the international standard for measuring corporate community investment” (Corporate Citizenship, 2014, p.6), the LBG model represents a straightforward input-output model allowing to compare invested resources with achieved results, eventually leading to the realised changes and enabling a precise impact measurement.

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impact’s intensity, viz. ‘connect’, ‘improve’, and ‘transform’ but also the type of impact, viz. ‘attitude change’, ‘skills or personal effectiveness’, and ‘quality of life/well-being’. The latter’s purpose is to identify the sector of CSR project, however, the framework’s classification is slightly confusing since e.g. education is not seen as a component of the ‘quality of life’ which might be debateable. Regarding the impact’s intensity, it is based on a “[…] three point scale identifying three distinct levels of change that a beneficiary might experience” (Corporate Citizenship, 2014, p.21). While the intensity ‘connect’ is mainly about the number of beneficiaries stating a slight change in a skill for instance, ‘improve’ implicates a significant progress by e.g. developing a new skill. Finally, the ‘transform’ element characterises a long-lasting change in people’s life such as employment. The complete LBG framework can be internalised by means of figure 6, added to the appendix. One of the huge advantages of this measurement tool is its ability to distinguish between a firm’s own contribution and that of partners, employees etc., and allowing the reporting of a company’s adjusted contribution solely (Corporate Citizenship, 2014).

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6. Methodology

In order to conduct this study (i.e. a qualitative case study analysis), a preliminary search was conducted online to identify automotive MNCs with a large amount of publicly available data. It was assumed that those companies would be also more willing to share further details about their CSR execution. Initially, the following companies were approached via their own corporate website or their parent company’s website while employees in charge were later approached individually, provided the respective contact details were accessible: Volvo India Pvt. Ltd., Ford India Pvt. Ltd., BMW India Pvt. Ltd., Mercedes-Benz India Pvt. Ltd., Volkswagen India Pvt. Ltd., Hyundai Motor India Ltd., Mahindra & Mahindra Ltd., and Tata Motors Ltd.

CSR policies were downloaded from the company website and further data on CSR activities were retrieved from announcements on the MNC’s website and its annual (global) report. In case of insufficient information on the various constructs of the research question (i.e. CSR actors, radius, budget, monitoring and measurement etc.), the respective department or employee was contacted. Common organisational areas and functions approached were the MNC’s Department of Communications, the Marketing Department, and, where available, the Head of Corporate Social Responsibility. Due to either inadequate data or a non-existent response rate, the initial sample got reduced currently comprising Volvo India Pvt. Ltd., Mercedes-Benz India Pvt. Ltd., Mahindra & Mahindra Ltd., Tata Motors Ltd, and one manufacturer to remain anonymous.

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relative values), and time (i.e. total man-hours per week). Finally, the x-axis will further represent the overall impact measurement (i.e. quality of life as a composite indicator of the aforementioned sectors). Marlier & Atkinson (2010) postulate an indicator adheres to basic principles like robustness or validity while being interpretable on a big scale and practicable at a minimum of cost. As far as a composite indicator is concerned they demand an equilibrium regarding the various dimensions, a proportionate weighting scheme for the indicator, and last but not least, the group of indicators should reveal transparency and easy access to the individuals (Marlier & Atkinson, 2010). In order to develop such a composite ‘quality of life’ indicator the well-structured framework as suggested by OECD (2008) should be followed.

Last but not least, depending on the data scope and completeness, the results might first be compared to the patterns of Indian automotive manufacturers, i.e. a cross-case analysis to identify a similar or distinct implementation of CSR initiatives. Second, a cross-validation with empirical findings could strengthen those patterns. Finally, based on the specific findings, the author expects to utter propositions which could form a basis for further field research and testing conducted in India as well as other emerging market countries and their corresponding local communities.

With regard to the outcome, the author assumes that the application of CSR activities has a positive impact on the development and quality of life of local communities. This relation could even be amplified when partnering with home-grown NGOs since local needs might be better met.

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Figure 6: Pre-Analysis Sample Matrix on CSR Execution and Impact Measurement

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Figure 6 cont.: Pre-Analysis Sample Matrix on CSR Execution and Impact Measurement

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7. Analysis

The lengthy and disappointing process of desperately attempting to access further data in order to conduct a highly qualitative case study analysis allied with an extremely poor to non-existent response rate has diminished the sample significantly. The subsequent sections will provide some insights into the following automotive manufacturers and their CSR activities: Mercedes-Benz India, one company that insisted on masking its name and hence will be referred to as ‘Western Manufacturer’ hereafter, Volvo India, and two Indian MNCs, viz. Mahindra & Mahindra, and Tata Motors.

7.1 Case: Mercedes-Benz India

Although not being able to present information exceeding Mercedes-Benz India’s CSR policy and the publicly available data on performed CSR initiatives 5, this car manufacturer should still be scrutinised. If not indicated otherwise, this section’s information is based on Mercedes-Benz India (2016a).

Founded in 1994, Mercedes-Benz India runs a manufacturing and assembly plant located in Chakan, about 30 km north of Pune, Maharashtra, with the largest production capacity within India’s premium automobile manufacturers (Mercedes-Benz India, 2016c). Besides the company’s duties to adhere to the Companies Act and its corresponding sections, Mercedes-Benz India (2016b) specifically acknowledges its social responsibility towards the society in the vicinity of its operating location which is derived from the usage of natural resources and its impact on the environment.

Although not explicitly stated, it can be assumed that the CSR activities as outlined on the corporate website (Mercedes-Benz India, 2016a) stem from the two preceding financial years, i.e. 2014-2015 and 2015-2016, most probably from the former since the year 2014 is mentioned in the description of a few CSR initiatives. For the purpose of this analysis, three CSR activities are chosen and further looked at.

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indicates that Mercedes-Benz India has accomplished the rebuilding in conjunction with the NGO, but alone instead. As far as an impact measurement is concerned, the corporate website leaves the reader in the dark whether such analysis was conducted, however, it is stated that a couple of pupils were top scorers in their final grade examinations with one former Vimlabai Nerlekar High School attendee achieving her undergraduate degree in engineering. Not only does this imply the company’s interest in its project’s impact but also that an internally run impact measurement is very likely. Regrettably, no information is provided on the financial means spent on this activity by Mercedes-Benz India, neither on a community’s involvement. Since “Mercedes-Benz India […] has undertaken the activity of demolishing the old building and constructing a new building” (Mercedes-Benz India, 2016a), a low community involvement can be presumed.

Second, another CSR construction initiative was undertaken in Aghane village, Ambegaon municipality, Dist. Pune, about 95 km away from its manufacturing plant. There, Mercedes-Benz India erected 4 class rooms and one auditorium as part of the local primary school, benefiting 62 boys. It is explicitly stated (Mercedes-Benz India, 2016a) that the supported school accommodates male children only. These children are part of relocated tribes and hence represent a historically disadvantaged part of the Indian society. In addition to the class rooms, Mercedes-Benz India supplied provision of water to the primary school. Though contributing to Shashwat’s initiative, a NGO, again it can be assumed that the said company was solely responsible for the construction, and likewise did not involve community engagement either. Similarly to the aforementioned initiative, no further information is given with respect to invested time and corresponding financial means. Finally, no evidence can be detected in favour of a conducted impact measurement.

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consideration, it is justifiable to say that Mercedes-Benz India mainly effects special-purpose donations while the NGO is primarily responsible for the project’s execution. Hence, a clear statement on the weight of involvement of the respective project cannot be made at this stage. Further, no further data is provided on the absolute amount of financial donations as well as on its impact.

Having gained a first impression of Mercedes-Benz India’s CSR community initiatives, one immediately notices that the majority of CSR activities undertaken are based on NGO initiatives instead of developing its own CSR projects (Mercedes-Benz India, 2016a). Furthermore, following the corporate website most CSR projects are performed in the CSR sectors of education or vocational training, indicating the company’s focus area. Although the reader might get the impression of highly superficial and subjective data made publicly available on the part of Mercedes-Benz India about its own CSR initiatives, the firm’s CSR policy shows the situation differently. Under appendix A, a table is presented which is used as part of the annual report on CSR activities to specify Mercedes-Benz India’s expenditure during each financial year.6 In addition to that, “a detailed report will be submitted to [the parent company] once a year” (Mercedes-Benz India, 2016b, p. 8). It’s the author’s opinion that sufficient data must be available in-house and that gaining access to this specific and valuable information would increase the study’s meaningfulness considerably.

7.2 Case: Volvo India

If not signified otherwise, the following information on Volvo India’s CSR initiatives stem from Mr. Randhawa’s explanations, Responsible Group Corporate Communications, CSR & Sustainability, as outlined in his emails. 7 This is due to the fact that Volvo India does not publish any CSR related information and the contacted Volvo Group, i.e. the CSR department of the parent company placed in Sweden, was not willing to contribute to this study.

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First, Volvo India conducted an Operator Training in conjunction with a partner company, namely GMR Varalakshmi Foundation in 2015. Although the name of the partnering NGO was not mentioned by the employee in charge, a further investigation online revealed it. Besides contributing to an increased employability of underprivileged and jobless adolescents, both companies pursue a higher supply of skilled operators as requested by India’s construction industry and thus also for their own good (Volvo Group, 2012). Apart from technical training on Volvo bulldozers, safety and efficiency training, also soft skill development like English speaking and writing capabilities as well as IT skills were taught (Volvo Group, 2012). Following Mr. Randhawa, this programme partly takes place at two locations, namely in Hyderabad (Shamshabab) and Delhi, about 560 km and 2,000 km away from Volvo’s manufacturing plant in Bangalore, provided one does not count the company’s corporate address in Delhi. According to Mr. Randhawa’s explanations, both parties are equally involved in the project’s realisation since “activities are jointly discussed and agreed upon on an ongoing basis”. This estimation can be confirmed as Volvo Group (2012) explicitly states that Volvo is in charge of the training, the provision of course material and appropriate construction equipment while GMR Varalakshmi Foundation provides the facilities with its training centre in Hyderabad. There, mostly young adults, being 18 years and older, living in the airport’s (i.e. Shamshabab) surrounding villages participate in this three-month operator training (Volvo Group, 2012). The community involvement is expected to be low which is caused by the fact that the training is mostly characterised by the attending youth, however, the initiative to organise and offer such a course is on part of the executing companies. As far as the project’s output and impact is concerned, almost 2,000 people were trained (Volvo Group, 2015) of which about 400 were qualified and thus likely to find employment within the operating construction equipment industry. According to the LBG framework, the impact’s intensity can be classified as ‘improve’.

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Though not being able to share cost-related (i.e. CSR budget) data, Mr. Randhawa disclosed the expenditure of human labour of Volvo India’s overall CSR implementation. It requires not only two full-time positions of a CSR country head plus a colleague but also, unsurprisingly, interdepartmental collaboration and support from other business units as well as external partners. Unfortunately, the author was not able to gain the invested man-hours in absolute values per project and how they are weighted among the various CSR projects.

Volvo India can be certainly regarded as a special case since its portfolio exceeds the segment of mere passenger cars but includes commercial vehicles such as trucks and buses as well as machinery (e.g. the Operator Training was carried out by ‘Volvo Construction Equipment’ and not Volvo India’s automotive division) which might dilute expected similarities in CSR handling between other Western automotive manufacturers. For instance, building a road within a village seems to be more plausible and might imply fewer difficulties for Volvo India since the required machinery is already available in-house.

7.3 Case: Western Manufacturer

Similarly to Volvo India, the said company does not publish any CSR related information on its Indian corporate website. Having approached the Director Corporate Communications India as well as the Head – Brand Communication and Media Planning unsuccessfully, it was finally the Head – Government and External Affairs, named Employee 3 hereafter, who responded to the author’s enquiries. If not indicated otherwise, the succeeding information relies on Employee 3’s e-mail message which can be consulted in the appendix of this study 8. Probing Employee 3 with two customised messages in order to receive the desired missing qualitative data remained unanswered until today. Hence, this section presents mainly one CSR project.

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2014, IANSlive, 2014). Although Employee 3 states a 50/50 participation of Western Manufacturer and said NGO in this programme and although the NGO’s founder praises both the relationship with said company and the parties’ common vision (The Times of India, 2014), the respective input contribution remains unclear and, most probably, can only be exposed through a personal interview session with Western Manufacturer and NGO. Noteworthy is the programme’s maxim ‘Helping People Help Themselves’ (The Times of India, 2014) which is founded on adolescents from the community who get trained to become youth leader and thus themselves are capable of teaching their community members (IANSlive, 2014). This type of sustainable support and long-term orientation can be understood as a community involvement within this project of medium level. Neither time- nor budget-related information was provided, however, Employee 3 stated the company’s annual overall CSR spending amounting to 1.85 cr INR. Last but not least, the programme’s impact cannot be presented as the project is still ongoing. However, by briefly outlining Western Manufacturer’s stress on “[…] sustainability, measurability, […], and long-term impact of the programme” (The Times of India, 2014), a prospective impact measurement to be conducted on behalf of Western Manufacturer seems very likely.

Despite not naming the partnering NGO for the described Skill Development project, a further investigation online revealed the respective NGO. This is completely beyond the author’s comprehension since this partner does not only have a substantial track record but has also been awarded (internationally) multiple times for its outstanding results (IANSlive, 2014). Neither referring to this partner publicly nor for the purpose of this study implies a lack of commitment towards the company’s own CSR projects, in the author’s view. Given the notable scope and output of the Skill Development programme, BMW India has still a lot to catch up on its communication and brand equity creation.

Besides, Employee 3 mentioned a second CSR activity which is supposed to have been carried out during previous business year. The so-called Green Housing project aimed at the lowest income strata of society, targeting adults. Regrettably, until today, no further information on the green housing project was provided by said company.

7.4 Case: Mahindra & Mahindra

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website. The second issue which is worth to be acknowledged is the company’s highly satisfying response rate to the author’s enquiry in terms of both process time and quality of information. Following the company’s business responsibility report as part of its annual report, the top 10 CSR programmes are highlighted which are: Mahindra Pride School, Project Nanhi Kali, Lifeline Express, Mahindra Hariyali, Swachh Bharat Swachh Vidyalaya, Arogya Sarthi/Project Bandhan, Project Prayaas, Road Safety, and Thalassemia Support Programme (Mahindra & Mahindra, 2015a). Owing to the capped word count of the present study, merely the first three CSR projects are further scrutinised below. This decision is not only based on a practical order but also based on the fact that, apart from one other initiative, all three considered CSR projects are highlighted in the company’s CSR policy (Mahindra & Mahindra, 2015b) which could be an indicator for the programmes’ extraordinary position among all other CSR activities. If not revealed otherwise, the succeeding sections refer to Mahindra & Mahindra (2015a).

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100% found a well-paid employment subsequently (Mahindra & Mahindra, 2015a). Hence, the impact’s intensity can be classified as ‘transform’ according to the LBG framework.

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esteemed Times of India Social Impact Award in 2015 underpins the programme’s extraordinary achievements (Naandi, 2015).

Finally, the Lifeline Express as one of Mahindra & Mahindra’s rare CSR projects targeting the health sector. Introduced in 1991 by ‘The Impact India Foundation’, Mahindra & Mahindra regularly sponsors Lifeline Express projects (Mahindra Remembers, 2015). Regarded as the first hospital train worldwide, the Lifeline Express involves 5 wagons, all equipped with brand new medical apparatuses and air-conditioning providing “[…] diagnostic, medical and surgical treatment […]” (Impact India Foundation, 2009, p.8) to the handicapped and needy in the countryside free of charge (Mahindra & Mahindra, 2015a). Treatments that are carried out are, among other things, orthopaedic, cataract, hearing and cleft lip operations as well as therapies of epilepsy and neurological disorders and of dental and oral health hygiene (Impact India Foundation, 2011). During financial year 2015, Mahindra & Mahindra funded four Lifeline Express projects which took place throughout India, namely in Uttar Pradesh, Bihar, Madhya Pradesh, and State of Telangana where the hospital on rails parked for about 20 days per district and treated 20,143 patients in total (Impact India Foundation, 2009, Mahindra & Mahindra, 2015a). Although a specific impact is not stated, it is very likely that such measurement is undertaken from time to time and published internally. This is due to the fact that for instance ‘Impact India’ requests a filled out feedback form from the patient which aims at identifying his or her satisfaction in terms of e.g. treatment and medicine (Impact India Foundation, 2009). If a sponsor like Mahindra & Mahindra supports the Lifeline Express projects, it can be assumed that both actors are equally involved in the project. Following Impact India Foundation (2009, p. 11), “[…] [both partners] share a joint responsibility not only financially, but also in every aspect of the organisational function of the project, […] [including] complete commitment, not only for the duration of the project but also for follow-up.” This argument is underpinned by Mahindra & Mahindra’s “publicity and initial screening of patients […]” (Mahindra Remembers, 2015) as carried out for the 15th Lifeline Express project in 2015. As far as the community participation is considered, merely a low involvement is realistic since it is mainly about attending appointments or counselling.

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representing 2.76%, 7.59% and 2.84% of Mahindra & Mahindra’s total CSR spending respectively. The report further provides the sum corresponding to the requirements of ‘The Companies Act, 2013’. According to that, the company was expected to calculate INR 83.03 cr for the purpose of CSR expenditure in financial year 2015. This guideline was even exceeded by spending an amount of INR 83.24 cr which is split among more than 31 CSR initiatives in total. 10

Though none of the examined CSR projects reveal data on the invested time per project, Mahindra & Mahindra calculated the overall amount of man-hours its employees volunteered, viz. 208,445 man-hours offered by 37,929 members of staff in 2015-2016. 11 These incredible numbers are based on Mahindra & Mahindra’s exceptional employee social options platform programme (ESOP) which offers members of staff the possibility to join a variety of CSR activities (Mahindra & Mahindra, 2015a). By verifying the figures’ validity, the author has to acknowledge that she must have received the Group wide numbers. In reality, following the company’s annual report, merely 19,836 members of staff were employed by Mahindra & Mahindra Ltd. as per 31 March 2015 (Mahindra & Mahindra, 2015a). Hence, the actual number of man-hours to be volunteered by its personnel must be lower than the above mentioned. Nonetheless, this is still an impressive performance in terms of employee CSR engagement. Noteworthy is the firm’s focus on education when it comes to CSR expenditure. In financial year 2016 almost half of all CSR spending is allocated for education related projects, followed by CSR spending on public health (i.e. 17.31%) and rural development (i.e. 15.33%). 11

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7.5 Case: Tata Motors India

Similar to the case of Mahindra & Mahindra, Tata Motors India offers lavish data on its CSR programmes as publicly available in various reports. Owing to the paper’s capped word count, only the salient facts are outlined below while the company’s CSR philosophy and its respective initiatives can be studied in detail via its Business Responsibility Report, Annual CSR Report or its Sustainability Report for the financial year 2014-2015 respectively. The relevant facts of the three projects that came under scrutiny, however, are included in the post-analysis matrix.

First, through the company’s own NGO (i.e. Sumant Moolgaokar Development Foundation) and under the National Drinking Water Programme (i.e. Amrutdhara), Tata Motors equipped 34 villages, mainly drought-prone hamlets, with installed hand pumps which guarantees safe drinking-water and prevents villagers from unsafe carrying and drinking of nearby river water (Tata Motors, 2015c). Community involvement can be regarded at medium level since “[…] community institutions [are developed] to ensure that the drinking water structures are well maintained and managed by the community” (Tata Motors, 2015b, p.9). Between 2014-2015 16,163 people benefitted from Tata Motors’ engagement which certainly resulted in an improved health of the persons affected, however, no impact is stated about it (Tata Motors, 2015b). Given the fact that Tata Motors claims to run impact assessments regularly, it seems very likely that such details are available internally (Tata Motors, 2015a).

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Third, Tata Motors embarked on the maintenance of rainwater conservation structure in Vanaria, a village not too far away from Tata Motors’ Gujarati manufacturing plant. Since this area is characterised by aridity and low precipitation, it is absolutely essential to store every amount of rainwater during India’s monsoon season. Hence, Tata Motors kept up the village’s pool and purified it. Due to the de-silting, the pool is now able to store up to 200,000 m3 (compared to 118,125 m3)of rainwater while simultaneously improving wheat farming of 70 smallholders (Tata Motors, 2015b). Undoubtedly, the increased storage capacity can be classified as ‘improve’ impact intensity according to the LBG model.

Moreover, noteworthy is Tata Motor’s impact measurement carried out by a renowned external auditor in the form of a SROI analysis for the skill development programme performed at the Ramakrishna Mission Ashram in Thane, Maharashtra over a period of 10 years, involving youth from the tribal region. According to the study, not only got 60% of the participants employed within one month after completion of the programme but 80% of the youth also claimed an improvement in their quality of life (Tata Motors, 2015b). The report further reveals that “[…] a rupee invested […] has generated social value which is of three time of the initial investment” (Tata Motors, 2015b, p.27). Tata Motors considers a future implementation of such a SROI framework for the purpose of its CSR projects’ impact measurement at firm-level in the years to come (Tata Motors, 2015d).

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Regrettably, Tata Motors India has not yet replied to the author’s enquiry, neither to the general enquiry via the corporate website nor to specific messages sent directly to the Head of Corporate Communications, Ms. Minari Shah, requesting further information regarding the SROI and other specific projects. However, since Tata Motors is one of the automotive manufacturers with detailed CSR and Sustainability Reports publicly available, it seems reasonable to suppose that the author’s enquiry was considered as redundant and hence no statement was issued. Merely the scarcity of in-depth CSR budget and expenditure data could be criticised.

Having conducted a single case study analysis of 5 selected automotive companies operating in India, a cross-case analysis is performed hereafter in order to assemble insights from these various case studies.

7.6 Cross-Case Analysis

When comparing these various case studies, immediately one notices the distinct differences in data availability between Indian and Western automotive companies. One possible reason is the stricter reporting standards for listed, and thus Indian, manufacturers. The examined foreign car manufacturers operate in India in the form of a WOS and hence are not subject to these reporting rules. Disguised but positive data of successfully (jointly run) CSR projects were solely noticed on the part of Western manufacturers as it was the case with the anonymous company. Similarly, finding Volvo India’s NGO partner for the Operator Training course was not simple either. The reasons for not referring to the established NGO in these cases are unknown to the author.

Although it seems like as if only one governmental project (i.e. School Promotion Campaign) was supported, this is not quite the reality. For instance, Mahindra & Mahindra’s largest CSR project (i.e. budget-wise) is the government’s Swachh Bharat Swachh Vidyalaya campaign (i.e. ‘Clean India. Clean Schools.’), accounting for 17.30% of the company’s overall CSR expenditure. However, regarding the examined companies, governmental programmes are much rarely supported than compared to NGO run CSR project.

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beneficiaries (i.e. Nanhi Kali, Hospital on Rails, Drinking Water Programme, and the Skill Development/Livelihood Programme), one has to acknowledge that three out of four were run jointly between the respective manufacturing company and local NGO, probably indicating a recommended course of action when aspiring a huge outreach.

Having examined a diversity of CSR projects, the author did not come across a clearly high community involvement which would imply an action towards an automotive company on the part of the community with the purpose of a much needed CSR programme to be performed in its habitat. Only medium to medium-high degrees of community involvement were identified indicating merely an active participation and the responsibility of e.g. mentoring or promoting activities. A clearly high community involvement seems very unlikely, especially given the prevailing cultural characteristics in India. Since India is prone to score high in power distance, a hierarchical society is somewhat accepted including inequalities in terms of rights, and stricter top-down communication and information flows (Hofstede, 2016). This all makes an active role on the part of the marginalised groups very questionable. Rather, the initiative would stem from a NGO in search for an adequate corporate partner for an envisaged CSR activity. Nonetheless, a positive correlation between the degree of community involvement and realised impact seems plausible.

Similar to the impression gained at single case studies, it now becomes obvious that education and health (i.e. five and four projects in total respectively) are the preferred sectors to perform CSR activities in India. Though one could expect a focus on children and girls in particular when it comes to CSR engagement (e.g. girls are often put at a disadvantage regarding education or vocational training), this study does not reveal a pattern since also adults are addressed, especially in the ‘all villagers’ projects. Besides that certain programmes target young adults specifically.

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To be in line with the previously introduced pre-analysis matrix, the author would like to cast light on the issue of CSR expenditure. Owing to the fact that the majority of foreign MNCs did not make their project-wise CSR spending available (in some cases not even their overall CSR expenditure), the various companies are hardly comparable to each other. Nevertheless, not providing the firm’s CSR spending might implicate that those organisations underperform and do not fulfil the legal requirement.

Out of the five projects that evidently state an impact, four of them were either targeted at supporting education or vocational training leading to the assumption that these are the two areas with the most promising impact.

Indian manufacturers appear to be both better prepared and oriented towards the BoP, which is also reflected in their CSR activities. The road shows of Mahindra’s Pride School are a great example. There, alumni do not only function as brand ambassadors to the smallest villages but also still stay in contact with the manufacturer while already pursuing a lucrative job. Due to a rigorous pre-assessment of the student and a likely resulting successful career, Mahindra & Mahindra knows how to create its own prospective customers. Such kind of mentorship programme could be beneficial for Volvo India and its partner NGO as well. Furthermore, highly recommended is the implementation of a type of pre-assessment programme to identify the student’s interests, strengths and weaknesses. Not everyone might be suitable for a future employment as operator. This procedure might be advantageous for both sides: The young adult who realises that a training course in e.g. a business or IT related sector would suit him/her better and Volvo India who can be sure that the chosen candidate will actually be eligible for the operator construction equipment business increasing the programme’s impact considerably. Hence, Mahindra & Mahindra’s Pride School and its placement rate of 100% can truly be considered as best practice.

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Figure 7: Post-Analysis Matrix on CSR Execution and Impact Measurement

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