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Corporate Social Responsibility in an Indian Public Sector Organization: A Case Study of NTPC*

CASE STUDY, CORPORATE SOCIAL RESPONSIBILITY
ET Cases - GSMC, 20 Pages

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Corporate Social Responsibility in an Indian Public Sector Organization: A Case Study of NTPC

 

NTPC, a Public Sector Undertaking (PSU), founded by the Government of India in 1975, under the Ministry of Power, Government of India, incorporated under the Companies Act 1956, is engaged in the business of generating power (electricity) and allied activities. The Company operates its activities from its Headquarters situated at New Delhi. It was ranked 384th in the world in the Forbes Global 2000 ranking for the year 2012. As on March 31st 2013, the Company held 75% of its equity shares. NTPC does its main business in generation and sale of power to power distribution companies of the country and State Electricity Boards in India. Consultancy and contracts of turnkey projects are also undertaken by NTPC, which include engineering, project management, construction management and operations management of power plants. Of late, the company has also engaged itself into oil/gas exploration and coal mining activities. Being the largest power company in India, it generates about 45KMW of power which is about one fifth of total national capacity but it contributes to more than a quarter of total power generated in India. This is because the company operates its power plants at higher efficiency levels. In May 2010, NTPC was conferred Maharatna status by the Government of India.

NTPC – Core Values

The company’s core values as stated on the company’s website signify the importance of being committed which are as follows:

B Business Ethics
E Environmentally & Economically sustainable
C Customer Focus
O Organizational & Professional Pride
M Mutual Respect and Trust
M Motivating Self and Others
I Innovation and Speed
T Total Quality for Excellence
T Transparent and Respected Organisation
E Enterprising
D Devoted

NTPC – Products and Services

In the year 1975, NTPC was established to give a boost to thermal power generation. Parallely NHPC was also formed. Earlier, there was no power generation in the central sector, and everything was at the state level. Under the leadership of Mrs. Indira Gandhi, it was realized that power being such a basic and important need cannot be centralized only at the state level. So, power became a major component and several portfolios were identified as the main products and services............

Teaching Note Preview

Corporate Social Responsibility in an Indian Public Sector Organization: A Case Study of NTPC

 

Synopsis

The society and the nearby local community is the major resource pool for any company to plan for their manpower requirements and also the level of acceptance for all company operations. The society is one such entity on which the organizational existence depends. The organization is dependent on the society both for inputs – labour and other materials and also for output – consumption of products and services produced. So, it is not just a mere duty which needs to be fulfilled rather an organization should consider giving back to the community which deserves it in its right spirit. In this teaching note, the case study of an Indian Public Sector Undertaking like NTPC is being used to describe their various key community-related initiatives. NTPC being one of the “Maharatna” companies has undertaken various CSR initiatives not only within their local vicinity but also in and around the areas of functioning. The two key issues of the case study are ‘sustenance’ and ‘effectiveness’ of their key community-related initiatives. Because of the plants being situated in different parts of the country, the geographical and (sometimes) demographical diversity adds on to the complexity of maintaining consistency within the implementation of the key community-related initiatives. This brings up to the question on the sustainability and effectiveness of the CSR initiatives.

Prerequisite Conceptual Understandings (PCUs)/Before the Classroom Discussion

  • • Michael E.Porter, Mark R. Kramer, “Strategy and Society: The link between competitive advantage and corporate social responsibility”, Harvard Business Review, 2007, pp 1 – 16.
  • • Oliver Falck, Stephan Helbich, “Corporate social responsibility: Doing well by doing good”, Business Horizons, 2007, 50, pp 247-254.
  • • Kotler.P, Hessenkiel.D, Lee.N, “Good Works! Marketing and Corporate initiatives that build a better world and the bottom line”, John Wiley and Sons, 2012.

 

Case Positioning and Setting

It can be used in various graduate and undergraduate courses related to CSR, corporate citizenship, ethical leadership, general management, strategic management and public sector business. The case is relevant for MBA Program and Executive Development Programs. It can also be used in courses related to public sector business. The case provides an idea about the functions and processes which these large scale Indian organizations undergo while implementing their key community-related initiatives.

Assignment Questions

I. Does NTPC’s CSR strategy have an impact on the local community? Why should the company engage in CSR?
II. Do you think that NTPC’s present CSR communication is helpful in averting the community disturbances arising from land acquisition?
III. What, in your opinion, should NTPC do in order to make their key community-related initiatives more sustainable?

Teaching Plan

This case needs to be distributed in advance and can be discussed in a class time of 75-90 minutes as follows:

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$4.57
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Product code: CSR-1-0011, CSR-1-0011A

Abstract

Corporate Social Responsibility (CSR) as a concept and practice has received increasing importance, particularly in the last couple of decades. There is enough evidence worldwide on the potentially significant role that firms can play in furthering social, ecological and environmental sustainability. Some organizations are adopting the CSR practices voluntarily while others have to be coerced. Various CSR initiatives that firms have been engaging with are adult education, women empowerment, water and energy conservation, medical assistance and so on. The motivations or reasons for adopting CSR initiatives also vary from primarily philanthropic to strategic concerns. Today, CSR has become an integral part of the business strategy of most organizations, be it the multinationals, public sector or private sector firms. The general belief among the public is that private firms engage in CSR activities to a significantly higher extent when compared to the public sector firms. However, some of the public sector firms such as NTPC, NHPC, BHEL, BPCL, etc. have also been fore-fronting implementation of a range of CSR activities as part of their business strategy.

The present research seeks to understand the nature of CSR activities undertaken by NTPC, a public sector undertaking of India. NTPC is a Central Public Sector Undertaking (CPSU) under the Ministry of Power, Government of India, engaged in the business of generation of electricity and allied activities. NTPC has adopted several innovative CSR initiatives in and around its plants. CSR has been synonymous with company’s core business strategy of power generation. Community development though CSR is viewed as a prime responsibility. The classification provided by Haberberg and Mulleady (2004) was used to identify the reasons for adopting CSR actions by firms. The model identifies five such reasons, viz. philanthropic, normative, competitive, coercive and enlightened self-interest. The result suggests that ‘Philanthropic reason’ was found to be the most dominant reason for adopting CSR action.



Pedagogical Objectives


The case can be used to explain various theoretical concepts:
  • Corporate sustainability through CSR activities
  • Effective communication of CSR activities within the firms
  • Understand the consequences of short-sighted approach for CSR

Case Positioning and Setting


It can be used in courses related to CSR, corporate citizenship, ethical leadership, general management, strategic management and public sector business. The case is relevant for MBA and Executive Development Programs. It can also be used in courses related to public sector business. The case provides an idea about the various processes which these large-scale Indian organizations undergo while implementing their key community-related initiatives.


* GSMC 2017, IIM Raipur


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