Hydrodrift Corporate Social Responsibility

Abstract:

Hydrodrift (fictional) is a manufacturer and supplier of water pumps for industrial services and was established in the United Arab Emirates in 1980 and has been one of the main supplier of high-pressure pumps to the hydro jetting companies in UAE. They were able to solidify their business and establish its roots deep into this industry due to the lack of competition in the pump business and the importance of hydro jetting in the oil and gas

industry which one of the main industries that contribute towards UAE’s wealth.

This report will help determine the cons and pros of extending Hydrodrift’s business to India which is a diverse and fast developing country by:

• Analysing India’s national business system and cultural conditions.

• An assessment of implications of relevant international institutions.

• Analysing the problems of establishing and operating a cultural social responsibility policy.

TABLE OF CONTENTS:

1. Introduction

2. National Business Systems and Cultural Climate

3. Implications of International Institutions

4. Corporate Social Responsibility Policy and Issues

5. Conclusion

6. References

1.Introduction:

The Pump industry is growing worldwide and with its growth comes the challenge of companies to grow along with the industry. Hydrodrift has been performing extremely well for the past few years in the pump industry here in the United Arab Emirates (UAE). Even with the fall in oil prices there is no shortage of orders from companies that require water pumps for their business activities. Keeping in mind that pumps can also be used in other industrial as well as domestic applications, setting up or extending Hydrodrift’s business to another country is an excellent but challenging idea.

“India’s pump industry has been growing rapidly with an annual growth rate of 10% and the industry offers among the highest net value additions in the engineering industry – of over 20%. Moreover, the domestic market for Indian Pumps is growing at a healthy rate of 16-18% per annum.” (Indian Pumps And Valves, 2017)

With these figures it is very tempting to introduce Hydrodrift in India and create profit. But we need to know if this decision of extending our business overseas into India will have a

positive or negative effect on the company.

According to Wikipedia, UAE and India enjoy historic ties with as many as 2.5 million economic migrant workers of Indian origin residing in the oil rich gulf state. Indians also make up the largest ethnic group in the UAE making up roughly 27% of the total UAE`s residents. These economic migrants over the years have also made a significant economic contribution to India in the form of remittances worth billions of dollars. In 2008-13, India emerged as one of the biggest trade partner of the UAE with bilateral trade between the two countries exceeding US$75 billion. UAE and India are one of each other's largest trading partners. The trade totals over $75 billion. (En.wikipedia.org, 2017)

2. National Business systems and Cultural Climate

India is the seventh largest country in the world and one of the biggest democracy. It is the second largest populated country and has many states and Union territories under its democratic rule. One of the fundamentals of the Indian culture, vital for our business to succeed, is the understanding of traditions and the ways of communicating with others that forms the basis of the Indian society.

“In India, there seems to be no one dominant business system but a range of identifiable systems, each with its own rules and practices”. (Clusterobservatory.in, 2017)

Considering our industry of pump manufacturing and supply, there are many public and private sector companies that operate within this industry in India with the majority being private sectors. The business systems in India runs in a more survivability regime with the most dominating companies standing up in the food chain and the others making the large climb up this ladder.

In UAE, there are no taxes levied by the federal government on income and wealth of companies and individuals. This is not the case in India, hence we must be well educated in the field of taxation in India. There is a 40% corporate tax for foreign companies and branches of foreign companies imposed by the government of India. Serious consideration and research need to be done on the Tax laws before investment.

Two main opposing perspectives exist regarding India’s business culture. The first is that Indian businesses practice an old fashioned corporate culture. They transfer socio-religious hierarchical structures to their workplaces. The power distance between the senior level employees and the junior level employees are very high in many industries and companies in India. Indian firms have a lower degree of delegation as compared to UAE firms and the Indian management tends to be hierarchical and person oriented. this implies that the senior manager is a benevolent autocrat, the organisation is hierarchically structured, lower level managers avoid decision-making and are reluctant to take on responsibility and prefer to follow closely the instructions of superiors.

“Another explanation for India’s corporate culture being viewed as old-fashioned is the existence of large numbers of family-run businesses. India has 108 publicly-listed family-owned businesses, the third highest in the world, while China tops the tally with 167 such companies followed by the US which has 121.” (The Hindu Business Line, 2017)

Hydrodrift will have to face a number of challenges from companies and the government to establish itself and start running our production line smoothly as these family run companies India for example ‘Kirloskar pumps’, which is run by the Kirloskar brothers, has a strong foothold in this industry in India. Family run business can have good influences