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............
Objectives of the Case Study
Understanding the effectiveness of the society and community-related practices (in terms of sustainability) adopted by the leading PSU (NTPC) is the main objective of this case study.........
Methodology of the Case Study
The sample for the study comprised of 20 middle and senior level executives working in NTPC. Document analysis of the company’s Annual Reports was also done. Each interview was semi-structured with few fixed parameters within which the interviewer has to restrict so as to avoid deviation and unnecessary exaggeration. However, few important steps were followed in all the interviews as a prerequisite: ........
Reasons for Adopting CSR Practices
The interview analysis revealed that the organization believed that growth is only possible through an inclusive approach. The survival and existence of every organization depends on the acceptance and cooperation of the society. The company cannot grow in isolation and it has to include the society in its growth, not as an obligation but to create a responsible business movement throughout the community................
CSR at NTPC
NTPC believes in doing business by adding value to the community and society around its stations on a sustainable basis through dedicated policies, institutional setup and engagement process to promote inclusive growth. It values the partnerships it builds with the communities around its units. For NTPC, CSR is not only a responsibility but also about maintaining an effective social relationship.............
CSR Objectives of NTPC
1. Leading the sector to protect environment in the areas of effective ash utilization, peripheral development and energy conservation practices.
2. .........
CSR – Community Development Policy
NTPC have a separate CSR-CD policy which covers a wide range of activities staring from Unit level - Regional level - National level, including implementation of key programs through the company foundation. NTPC aims to be a socially responsible corporate entity and to lead the sector in the areas of R&R and CD.............
CSR Structure at NTPC
NTPC committed itself to social development since inception and hence has a comprehensive R&R policy for CD activities. CD activities in green field area, according to the company’s policy, starts as soon as a new project is conceived and thereafter extensive peripheral development activities are taken up along with the project development. A separate CSR-CD Policy covers a wide range of activities starting from unit level to regional and national level including implementation of key programs through ‘NTPC Foundation’..............
Three-Tier Structure of CSR at NTPC
NTPC follows a three-tier structure for implementing their CSR-CD activities as below:
1) Corporate center
2) Regional headquarters
3) Operating stations at each region.
However, besides the institutional set-up of the organization for CSR, the NTPC also organizes.....................
CSR process at NTPC
The CSR process comprises of five stages (Exhibit V). These are as follows:
1. Budget Allocation
As per current DPE norms, the company Board has approved to incur 1% of net profit of the previous year for CSR and.....................
2. Planning
The company has adopted a Bottom-p approach for planning. Activities are planned based on Need Assessment Survey..............
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Key Community-Related Initiatives by NTPC
Highlighting the importance of being sensitive to the requirements of the local community, one of the respondents mentioned that CSR focus of the company is to build relationships with the society. The company works in a very systematic and planned way towards CSR. From the interviews, it was found that the company always emphasizes on a long-term perspective towards CSR..................
Corporate Philanthropy: The ultimate aim of the organization’s CSR is in making the community independent and empowers them with education and other livelihood
opportunities for a sustainable future.................
Community Volunteering: The volunteering in various community activities within the organization are promoted through the NGO’s created by the employees at their respective power stations.............
..............
Sustainability Mechanisms of the CSR activities
NTPC has a systematic mechanism to ensure the effectiveness of these CSR activities. NTPC hands over the functioning of the assets created by them to the Village Development Advisory Committee............
Corporate Social Responsibility Awards by NTPC
• NTPC awarded with BT-CSR Awards 2016 - NTPC has bagged 2 prestigious awards in CSR – Public Sector Enterprise of the Year and Swacch Bharat Categories in Bureaucracy Today-CSR excellence awards held on July 14th 2016 recognizing social initiatives of corporate organizations and contribution of those who have driven social change in India through their unique CSR initiatives.
• .............
Organizational Strengths with Respect to Society and Local Community
Highlighting the CSR activities as being the strength of the organization, the following have been identified as the core benefits:
CSR integrated with core business strategy – The company has integrated the concept of CSR with their core business strategy. The company has been very responsive in their approach to solve the local community’s needs on time................
Promoting volunteerism – The company has a well-organized system to encourage and accommodate the volunteers for CSR activities...........
..............
Organizational Areas of Improvement with Respect to the Society and Local Community
CSR scope – The concept of CSR is applicable to all the stakeholders of the company. The respondents replied that the company promotes CSR activities mainly where the plants are established and it is limited to the plant level.........
Mode of interaction – The company does not have a system of societal interaction directly at all the levels. Apart from the volunteers, it is only the Human Resource department which channelizes the communication between the company and society............
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Assignment Questions
I. Does NTPC’s CSR strategy have an impact on the local community? Why should the company engage in CSR?
II. .................
Exhibits
Exhibit I: Characteristics of the Sample of Interviewees
Exhibit II: CSR Structure of NTPC
Exhibit III: Pictorial Representation of NTPC CD Staff
Exhibit IV: A Glimpse of CSR Structure at NTPC
Exhibit V: CSR Process at NTPC
Exhibit VI: NTPC Chart of Various Social Initiatives
Exhibit VII: Sustainable Mechanism of CSR initiatives at NTPC
