1. INTRODUCTION 1.1 RESEARCH BACKGROUND AND DESCRIPTION OF THE SPECIFIC INDUSTRY Corporate Social Responsibility - What does it mean? Different organizations have framed different definitions - although there is considerable common ground between them. CSR is about how companies manage the business processes to produce an overall positive impact on society. Take the following illustration:
Companies need to answer to two aspects of their operations. 1. The quality of their management - both in terms of people and processes (the inner circle). 2. The nature of, and quantity of their impact on society in the various areas. OTHER DEFINITION: The World Business Council for Sustainable Development in its publication "Making Good Business Sense" by Lord Holme and Richard Watts, used the following definition. "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large" "CSR is about capacity building for sustainable livelihoods. It respects cultural differences and finds the business opportunities in building the skills of employees, the community and
1
the government" from Ghana, through to "CSR is about business giving back to society" from the Phillipines. The voluntary compliance of social and ecological responsibility of companies is called Corporate Social Responsibility (CSR). THE BUSINESS BENEFITS OF CSR: Companies that implemented csr measures and activities experienced a wide range of bottom-line benefits, such as: • • • • • • • • • • • • More productive, motivated and committed workforce Increased ability to attract and retain employees Reduced costs from injuries and absenteeism Increased capacity for managing risks and changes Reduced operating costs Enhanced brand image and reputation Increased sales and customer loyalty Increased productivity and quality Reduction of wastage and more efficient, environmentally-friendly production techniques Increased reliability of suppliers and standardization of products Improved access to capital and licence to operate
Benefits of Corporate Social Responsibility: “88% of consumers said they were more likely to buy from a company that supports and engages in activities to improve society.” “Companies that simply do everything they can to boost profits will end up increasing social welfare. In circumstances in which profits and social welfare are in direct opposition, an appeal to Corporate Social Responsibility (CSR) will almost always be ineffective, because executives are unlikely to act voluntarily in the public interest and against shareholder interests,” says Professor Karnani. He adds that, by engaging in social issues, managers are sacrificing profits and essentially imposing a tax on shareholders. Therefore, Corporate Social Responsibility conflicts with creating better corporate governance, since the managers’ job is to act in the shareholders’ interest.
2
Eighty-three percent of U.S. consumers want more of the products, services and retailers they use to benefit causes, according to the new 2010 Cone Cause Evolution Study. 85 percent have a more positive image of a product or company when it supports a cause they care about, and 80 percent are likely to switch brands, similar in price and quality, to one that supports a cause. COMPANY PROFILE:
Audco India Limited (AIL),a premier valve manufacturing company, is jointly owned by Larsen & Toubro Limited(L&T) in India and Flowserve Corporation, USA. It is one of the largest integrated valve manufacturers in the world. AIL's manufacturing operations commenced in 1962 and over last four decades the company has expanded to cater to the needs of the national and the International markets. Present manufacturing range includes Valves, Actuators and Special Valves for Power plants. The company leverages its world-class capabilities in Design, Quality Assurance and Manufacturing to ensure that their products consistently meet customer expectations in terms of quality and reliability. AIL, today has three independent modern manufacturing plants capable of producing thousands of valves. The main plant is at Manapakkam, Chennai (Madras) in Southern part of India. The other two plants are at MM Nagar, 40 Kms south and at Kancheepuram, 70 Kms west of the main plant at Chennai. The manufacturing range of AIL includes,
•
Gate,Globe and Check Valves Process Ball Valves Trunnion Mounted Pipeline Ball Valves
• •
3
Boltedvalve_ail300
Multiport ball valves
full bore
PLUG-VALVE- pressure balanced
Pressure seal bonnet design
Reduced bore
Special purpose for steam service
Cryogenic values
Reduced bore type
4
• • • •
Resilient Seated Butterfly Valves Metal Seated Butterfly Valves Pneumatic Actuators and Valve Automation Plug Valves
Marketing Network: All products manufactured by Audco India Limited are marketed worldwide by Valves Business Group of Larsen & Toubro Limited. L&T Valves Business Group has offices in the USA, India and China, and strategic alliances with leading integrated valve distributors and agents in the major markets.The marketing network is supported by an experienced team of valve specialists. Global Marketing Network: We have an impressive track-record of supplying valves to the global oil majors for their projects and plants in the USA, Europe, the Middle East, Africa and Asia-Pacific. Quality: "Our commitment is to offer quality products at all times under the most stringent quality processes" As a philosophy, Quality and Reliability are built into every valve through a meticulously implemented Quality Assurance Programme.
The Quality Management System of AIL has been certified to comply with:
• •
ISO 9001: 2008 API Spec. Q1
AIL is licensed to use the API 6D Monogram and the CE Marking. The Quality Assurance and Quality Control capabilities are benchmarked to global standards:
• • • •
State-of-the-art Gauge Calibration Center Metallurgical Lab In-house Non-destructive Test Facilities & ISNT certified personnel Pressure Test Facilities
5
Design Centre: Audco's high-calibre design team's expertise in valve design, together with its integrated state-ofthe-art 3D design software, CAD/CAM systems, Pro-e systems fully exploit the opportunities for innovative and competitive engineering solutions whilst ensuring compliance with all relevant design standards. Concurrent engineering and parametric design techniques are adopted to reduce product development lead times and to ensure that the valves reach the customer faster. "Our aim is engineering efficiency and excellence" Audco is a pioneer in developing new designs of large size valves for high pressure and temperature , cryogenic, severe service requirements catering to Hydro carbon industries and specially custom made engineered products for specific mission critical applications.
CORPORATE SOCIAL RESPONSIBILITY IN AUDCO INDIA LTD: Audco concentrate on four core thrust areas such as 1) Education 2) Health 3) Volunteering 4) Environment • EDUCATION:
6
? Focused training programs / quiz for school children. ? Improvements of schools- Teaching aids, Computers etc.
? Providing dictionaries (194 students of 8th and 9th Govt Hr sec school at
Mugalivakkam). ? Vocational skill training for poor youth.
•
HEALTH: ? Mother and Child care campus. ? Protection against diseases at schools in villages. ? Aids/Tb awareness program. ? Community care- Diabetics, Dental and Eye care. ? Nutrition week for all contract employees.
•
ENVIRONMENT:
? ? ?
Tree plantation(saplings total quantity 106 current year nearby society). Rain water harvesting. Avoiding use of plastics.
7
•
VOLUNTEERING:
?
Blood donation by employees (106 volunteers, 142 units of blood).
? Distribution of Safe driving pamphlets.
TOTAL BENEFICIARIES PROVIDED BY AUDCO INDIA LTD (2010-2011):
•
• • •
Education Mother and Child health Employee volunteering Project ‘NEEV’
- 225 - 440 - 13 - 17
INTERNATIONAL CUSTOMERS
8
DOMESTIC CUSTOMERS
AWARDS AND RECOGNATION:
9
2010
EEPC India Award for export excellence National Award for export excellence given to CII-EXIM Bank Commendation for Strong Commitment to Excellence AIL’s Business Excellence initiative was part of MIPD / IPM-OC’s operational National Award for R&D Efforts in Industry The award is in recognition of Outstanding Achievements by the in-house R&D of Audco India Limited
2009
2006
Project management: L&T also has substantial experience in providing flow-control solutions to the key EPC contractors for world-scale projects across the globe. For the customers, our project management capabilities translate into savings in time and money.
1.2 IDENTIFIED PROBLEM: CSR is about how a company manages the business processes to produce an overall positive
10
11
doc_464972724.doc
Companies need to answer to two aspects of their operations. 1. The quality of their management - both in terms of people and processes (the inner circle). 2. The nature of, and quantity of their impact on society in the various areas. OTHER DEFINITION: The World Business Council for Sustainable Development in its publication "Making Good Business Sense" by Lord Holme and Richard Watts, used the following definition. "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large" "CSR is about capacity building for sustainable livelihoods. It respects cultural differences and finds the business opportunities in building the skills of employees, the community and
1
the government" from Ghana, through to "CSR is about business giving back to society" from the Phillipines. The voluntary compliance of social and ecological responsibility of companies is called Corporate Social Responsibility (CSR). THE BUSINESS BENEFITS OF CSR: Companies that implemented csr measures and activities experienced a wide range of bottom-line benefits, such as: • • • • • • • • • • • • More productive, motivated and committed workforce Increased ability to attract and retain employees Reduced costs from injuries and absenteeism Increased capacity for managing risks and changes Reduced operating costs Enhanced brand image and reputation Increased sales and customer loyalty Increased productivity and quality Reduction of wastage and more efficient, environmentally-friendly production techniques Increased reliability of suppliers and standardization of products Improved access to capital and licence to operate
Benefits of Corporate Social Responsibility: “88% of consumers said they were more likely to buy from a company that supports and engages in activities to improve society.” “Companies that simply do everything they can to boost profits will end up increasing social welfare. In circumstances in which profits and social welfare are in direct opposition, an appeal to Corporate Social Responsibility (CSR) will almost always be ineffective, because executives are unlikely to act voluntarily in the public interest and against shareholder interests,” says Professor Karnani. He adds that, by engaging in social issues, managers are sacrificing profits and essentially imposing a tax on shareholders. Therefore, Corporate Social Responsibility conflicts with creating better corporate governance, since the managers’ job is to act in the shareholders’ interest.
2
Eighty-three percent of U.S. consumers want more of the products, services and retailers they use to benefit causes, according to the new 2010 Cone Cause Evolution Study. 85 percent have a more positive image of a product or company when it supports a cause they care about, and 80 percent are likely to switch brands, similar in price and quality, to one that supports a cause. COMPANY PROFILE:
Audco India Limited (AIL),a premier valve manufacturing company, is jointly owned by Larsen & Toubro Limited(L&T) in India and Flowserve Corporation, USA. It is one of the largest integrated valve manufacturers in the world. AIL's manufacturing operations commenced in 1962 and over last four decades the company has expanded to cater to the needs of the national and the International markets. Present manufacturing range includes Valves, Actuators and Special Valves for Power plants. The company leverages its world-class capabilities in Design, Quality Assurance and Manufacturing to ensure that their products consistently meet customer expectations in terms of quality and reliability. AIL, today has three independent modern manufacturing plants capable of producing thousands of valves. The main plant is at Manapakkam, Chennai (Madras) in Southern part of India. The other two plants are at MM Nagar, 40 Kms south and at Kancheepuram, 70 Kms west of the main plant at Chennai. The manufacturing range of AIL includes,
•
Gate,Globe and Check Valves Process Ball Valves Trunnion Mounted Pipeline Ball Valves
• •
3
Boltedvalve_ail300
Multiport ball valves
full bore
PLUG-VALVE- pressure balanced
Pressure seal bonnet design
Reduced bore
Special purpose for steam service
Cryogenic values
Reduced bore type
4
• • • •
Resilient Seated Butterfly Valves Metal Seated Butterfly Valves Pneumatic Actuators and Valve Automation Plug Valves
Marketing Network: All products manufactured by Audco India Limited are marketed worldwide by Valves Business Group of Larsen & Toubro Limited. L&T Valves Business Group has offices in the USA, India and China, and strategic alliances with leading integrated valve distributors and agents in the major markets.The marketing network is supported by an experienced team of valve specialists. Global Marketing Network: We have an impressive track-record of supplying valves to the global oil majors for their projects and plants in the USA, Europe, the Middle East, Africa and Asia-Pacific. Quality: "Our commitment is to offer quality products at all times under the most stringent quality processes" As a philosophy, Quality and Reliability are built into every valve through a meticulously implemented Quality Assurance Programme.
The Quality Management System of AIL has been certified to comply with:
• •
ISO 9001: 2008 API Spec. Q1
AIL is licensed to use the API 6D Monogram and the CE Marking. The Quality Assurance and Quality Control capabilities are benchmarked to global standards:
• • • •
State-of-the-art Gauge Calibration Center Metallurgical Lab In-house Non-destructive Test Facilities & ISNT certified personnel Pressure Test Facilities
5
Design Centre: Audco's high-calibre design team's expertise in valve design, together with its integrated state-ofthe-art 3D design software, CAD/CAM systems, Pro-e systems fully exploit the opportunities for innovative and competitive engineering solutions whilst ensuring compliance with all relevant design standards. Concurrent engineering and parametric design techniques are adopted to reduce product development lead times and to ensure that the valves reach the customer faster. "Our aim is engineering efficiency and excellence" Audco is a pioneer in developing new designs of large size valves for high pressure and temperature , cryogenic, severe service requirements catering to Hydro carbon industries and specially custom made engineered products for specific mission critical applications.
CORPORATE SOCIAL RESPONSIBILITY IN AUDCO INDIA LTD: Audco concentrate on four core thrust areas such as 1) Education 2) Health 3) Volunteering 4) Environment • EDUCATION:
6
? Focused training programs / quiz for school children. ? Improvements of schools- Teaching aids, Computers etc.
? Providing dictionaries (194 students of 8th and 9th Govt Hr sec school at
Mugalivakkam). ? Vocational skill training for poor youth.
•
HEALTH: ? Mother and Child care campus. ? Protection against diseases at schools in villages. ? Aids/Tb awareness program. ? Community care- Diabetics, Dental and Eye care. ? Nutrition week for all contract employees.
•
ENVIRONMENT:
? ? ?
Tree plantation(saplings total quantity 106 current year nearby society). Rain water harvesting. Avoiding use of plastics.
7
•
VOLUNTEERING:
?
Blood donation by employees (106 volunteers, 142 units of blood).
? Distribution of Safe driving pamphlets.
TOTAL BENEFICIARIES PROVIDED BY AUDCO INDIA LTD (2010-2011):
•
• • •
Education Mother and Child health Employee volunteering Project ‘NEEV’
- 225 - 440 - 13 - 17
INTERNATIONAL CUSTOMERS
8
DOMESTIC CUSTOMERS
AWARDS AND RECOGNATION:
9
2010
EEPC India Award for export excellence National Award for export excellence given to CII-EXIM Bank Commendation for Strong Commitment to Excellence AIL’s Business Excellence initiative was part of MIPD / IPM-OC’s operational National Award for R&D Efforts in Industry The award is in recognition of Outstanding Achievements by the in-house R&D of Audco India Limited
2009
2006
Project management: L&T also has substantial experience in providing flow-control solutions to the key EPC contractors for world-scale projects across the globe. For the customers, our project management capabilities translate into savings in time and money.
1.2 IDENTIFIED PROBLEM: CSR is about how a company manages the business processes to produce an overall positive
10
11
doc_464972724.doc