This Project report is just an effort to throw some light on the Corporate Governance, Ethics & CSR activities which organizations like M/s Maruti Suzuki is following. This project report helps to do a critical analysis of building up Corporate Image & Identity based on Corporate Governance & CSR activities of the organization which they have achieved after satisfying their internal customers (employees) and external customers. Further, it also helps to establish a link between profitability & value which the organization has created over the years by following certain business ethical standards.
Based on the feasibility of data, we have decided to categorize the product portfolio of the company with the Indian consumer’s psyche and have tried to relate this with their present Corporate Image, Identity & Reputation. We thank our Professors & Mr. Ranjit Singh, Senior Manager- Corporate Planning & his team in diversifying our vision towards the above mentioned project. We thank them for their guidance and support.
INTRODUCTION TO MARUTI SUZUKI INDIA LTD
In February 1981 Maruti Udyog Limited (now Maruti Suzuki India limited) was incorporated under the provisions of the Indian Companies Act, 1956. It was established to meet the growing demand of a personal mode of transport caused by the lack of an efficient public transport system.
A license and Joint Venture Agreement was signed between Government of India and Suzuki Motor Company (now Suzuki Motor Corporation of Japan) in October 1982. It manufactured India’s first affordable cars. In the past twenty years it has diversified into various type of passenger cars catering to the need of different section of the population. Maruti Suzuki is India’s largest selling passenger car company. It is the market leader in India.
It is a leading four-wheeler automobile manufacturer in South Asia. Suzuki Motor Corporation of Japan holds a majority stake in the company. On 17 September 2007, Maruti Udyog was renamed to Maruti Suzuki India Limited. The company is listed on the Bombay Stock Exchange and National Stock Exchange of India. Suzuki Motor Corporation, the parent company, is a global leader in mini and compact cars for three decades. Suzuki’s technical superiority lies in its ability to pack power and performance into a compact, lightweight engine that is clean and fuel efficient. The company’s headquarters remain in Gurgaon, near Delhi.
The Gurgaon plant comprises of three fully integrated, state-of–the-art production facilities spread over a sprawling 297 acres. While the three plants have a total installed capacity of 350,000 cars per year, several productivity improvements over the years have made it possible to manufacture nearly 650,000 cars per year at these facilities alone. Working towards the goal of making India a global hub for small cars, Maruti and Suzuki have drawn up an investment plan of Rs 9000 crore in India upto 2010.
Maruti Suzuki offers 10 models, ranging from the people’s car, Maruti 800, for less than Rs. 00,000 ($ 5000) ex-showroom to the premium sedan SX 4 and luxury SUV, Grand Vitara. Their turnover for the fiscal 2007-08 stood at Rs. 178603 Million, Yen 449 Billion, $ 4. 512 Billion & Profit after Tax at Rs. 17308 Million.
COMPANY STRATEGY & CUSTOMER SATISFACTION
The company views its employees as internal customers and believes in delivering maximum satisfaction to them. It has an open culture which strives to achieve employee satisfaction through participative management, team work, sharing of information and continuous improvement. MUL is known for its flat organizational structure and its environment of trust and transparency which builds a sense of belongingness among employees.
There was a time (in late 1990’s) when Maruti faced some real competition with the entry of global players into India. Then company went back to the basics: What was it that the Indian customer desired? Maruti had the right products for India, ones with reliable quality, low cost, top performance and so on. What else could they offer their customers? It was then that we decided to focus on Customer Satisfaction. Caring for the customer, thinking from his and her point of view, building transparency in our interactions, orienting themselves to face the customer’s needs and concerns rather than the other way round.
If they could do all that, their satisfied customers would recommend their products to their friends and relatives and themselves buy their next car from Maruti. There was nothing new about this strategy; all companies swear by customer satisfaction. The challenge for them was to go beyond words and make it all work, convert intention into action, translate an intangible mission to tangible benefits, evolve from random and one-off customer benefit gestures to a consistent and systematic effort to satisfy the customer. They had to strive to internalize Customer Satisfaction and make it a way of life for themselves.
CORPORATE GOVERNANCE PHILOSOPHY
Maruti Suzuki (the Company) is fully committed to practicing sound corporate governance and upholding the highest business standards in conducting business. Being a value-driven organization, the Company has always worked towards building trust with shareholders, employees, customers, suppliers and integrity, equity, transparency, fairness, disclosure, accountability and commitment to values.
The Company fosters a culture in which high standards of ethical behavior, individual accountability and transparent disclosure are ingrained in all its business dealings and shared by its Board of Directors, Management and Employees. The Company has established systems and procedures to ensure that its Board of Directors is well-informed and well-equipped to fulfill its overall responsibilities and to provide the management with the strategic direction needed to create long-term shareholder value.
The Company has established systems & procedures to ensure that its Board of Directors is well-informed and well-equipped to fulfill its overall responsibilities and to provide the management strategic direction it needs to create long-term shareholder value.
The Company has multi-tier management structure, comprising the Board of Directors at the top and followed by Managing Executive Officers, Executive Officers and Divisional Heads.
Through this, it is ensured that:
- Strategic supervision is provided by the Board
- Control and implementation of Company’s strategy is achieved effectively
- Operational management remains focused on implementation
- Information regarding the Company’s operations and financial performance are made available adequately
- Delegation of decision making with accountability is achieved
- Financial and operating control and integrity are maintained at an optimal level
- Risk is suitably evaluated and dealt with
Composition of the Board of Directors (as on 31 March 2008): As on 31st March 2008, the Company’s Board of Directors consists of eleven members. The Chairman of the Board is a non-executive Director. The Board is made up of five executive Directors and six non-executive Directors, of whom four are independent. No Director is related to any other Director. All non-executive independent Directors are persons of eminence and bring a wide range of expertise and experience to the Board.
The Committee oversees redressal of shareholder and investor grievances, transfer of shares, non – receipt of balance sheet, non – receipt of declared dividends and related matters. The Committee also oversees the performance of the Registrar and Transfer Agents, recommends measures for overall improvement in the quality of investors’ services, approves issue of duplicate / split / consolidation of share certificates and reviews all matters connected with the securities transfers.
In order to provide efficient and timely services to investors, the Board has delegated the power of approval of issue of duplicate / split / consolidation of share certificate, transfer of shares, transmission of shares, dematerialization / re-materialization of shares not exceeding 2000 equity shares per transaction to the Managing Director, Director & Managing Executive Officer and Company Secretary & Chief Legal Officer severally.
Maruti Udyog along with Bharat Petroleum is rank highest in corporate social responsibility (CSR), according to the inaugural study by TNS Automotive, the world’s largest automotive research company and provider of custom research and analysis. Welfare Camps They organize blood donation camps along with Red Cross, in which employees donate blood. Eye check-up camps, family planning related camps and other health camps are also organized periodically. Medical support & welfare The employees of Maruti have always donated generously to people affected by natural calamities.
They contributed Rs. 2 million to rehabilitate earthquake victims in Latur. They also run a creche for the children of construction workers, which provide food shelter and education for 85 children. Education to underprivileged DPS Maruti Shiksha Kendra, an education programme for the underprivileged, was inaugurated at DPS, Maruti Kunj recently. The objective of his project is to educate the children of below poverty line (BPL) families from the nearby villages of Gurgaon district. 120 students in the age group of 5-8 years have already enrolled.
DPS Maruti Kunj is providing books, writing material and uniforms, refreshment and transport facilities to these children. Education Programme for mothers ‘Chetna’, an education programme for mothers – is an another endeavour to provide basic education to mothers of the students of DPS Maruti Kunj and surrounding villages. Majority of students at the school is first generation learners. Therefore, the concept of starting a movement of learning ‘Chetna’ for mothers has been promoted. The response has been encouraging and about 130 mothers are attending it regularly. Educational benefits:
Through the Maruti Employees Education Trust (MEET) they have set-up a well equipped modern school in association with Delhi Public School Society (DPS) at Maruti Kunj (Bhondsi), Gurgaon. This school will go a long way in providing quality education not only to the children of the employees at Maruti but also to the citizens of Gurgaon. Maruti and kids Maruti Udyog Ltd maintained and managed Children’s Park at the India Gate, is a popular learning and recreation spot among children. The park adjacent to India Gate is spread over 14 acres, is at the polygon between Dr Zakir Hussain Marg and Shah Jahan Road.