Chapter 5: PESTEL, Competitor Analysis & ETOP
? Many state governments have started the practice of extending various financial concessions/benefits linked to the level of employment creation. For example, Andhra Pradesh, Rebate on Cost of Land: IT/ITES units/ companies establishing their own facilities on clear Government land are eligible for a rebate in cost of land calculated at the rate of Rs.20,000/- per job created.
? Given Indias federal structure, a number of state/provincial governments also offer additional financial incentives to IT and BPO units setting up operations in the region. Typical incentives offered include capital investment and interest subsidies and subsidies on electricity tariff.
? The Foreign Trade Policy 2004 – 2009 permits import of all kinds of computers (except second hand computers) in India without any licenses. Foreign Trade policies also helped Tech Mahindra to have a long term client such as BT group.
? In order to promote domestic investment, foreign direct investment, transfer of technology / process know-how, technical collaboration, joint venture etc in India and export IT software products and services from India to the global market, both Government of India and State Governments in India have been offering a series of policy packages including tax breaks, import duty concessions etc under various schemes like:
o Export Oriented Units (EOUs) Scheme: The purpose of the scheme was basically to boost exports by creating additional production capacity.
o Electronics Hardware Technology Parks (EHTPs): Electronics Hardware Technology Park (EHTP) complexes can be set up by the Central Government, State Government, Public or Private Sector Undertakings or any combination thereof, duly approved by the InterMinisterial Standing Committee(IMSC) in the Ministry of Communication and Information Technology (Department of Information Technology).
o Software Technology Parks (STPs): The Software Technology Parks of India (STPI) have been set up by the Ministry of Information Technology, Government of India and the International Technology Park in a joint project by the State Government.
? Taxation change : Corporate tax rate has been cut down from 30% to 22%. Economics says that the corporate tax rate is now at par with the global average which is 23.79%. IT Sectors were already benefiting from SEZs(Special Economic Zones) but cut down ensures more tax benefit and a security of such benefit because SEZs benefits recedes with time.
? Inflation : When inflation rises price of goods and services rises at a higher rate and demand starts on decreasing. This has a direct impact on the company. But Tech Mahindra being an IT forum is less impacted.
? Economic growth : Not only Indias GDP is decreasing but a Global Economic Slowdown is taking place which isnt good for the whole economy including Tech Mahindra.
? Digital Economy: People are moving towards digital means in every sector which is highly beneficial for an IT company like Tech Mahindra.
? Job creating opportunities as people are getting more technological. As technology increases, more and more business comes up in the market which will directly create many job opportunities.
? Increased quality of life – People have already shifted and many are on the way to move towards the modern means of living. They are getting more attracted towards technological advancement now a days. Therefore, this change in mindset of people have a very positive impact on the company.
? Skilled human resource – People are more skilled now a days with creative and innovative ideas and therefore contribute in very different ways to the companys growth.
? Culture and beliefs are something that doesnt change mostly with the period of time. These may sometimes act as an barrier in the growth. As India has its own culture and believes and technology is taking over everything now a days. This may upset a huge population and thus it can create hinderances.
Here in this if they increase in new technology that can create new products and
process which can reduce the cost, and improve the quality, which can lead to
innovation and also reduce the life cycle of the product. By adopting this
technology, it will benefit consumers as well as organizations.
These are the factors related to Mahindra & Mahindra group:
o They do continuous technological innovation.
o If they do the continuous improvement in technology it will reduce use of Renewable energy development.
It is a well-known fact that technology changes rapidly, and the consumers are
hungry to adopt new technology as much as they can. Now in this it involves
understanding factors which are related to technological advancements, rate at
which technology gets obsolete( for example we can say: the operating system in
mobile phones which customers uses), automation, and innovation.
Being an IT company, Tech Mahindra is responsible for its E-waste and electricity consumption behavior. Tech Mahindra realizes its environmental responsibilities hence they are not only working towards reducing their own carbon footprint but also helping others:
? MARSHAL: Managing Aquatic Resources for Shale: The framework covers the whole lifecycle of water management and provides insights & solutions to use water sustainably.
? Operations & Locations adhere to Centralized E-waste policy.
? Installments of Solar Plants at its offices, an ongoing process.
? Tech Mahindra has successfully reduced its per capita consumption of electricity by 24% over their baseline figure of FY 2012-13.
? Initiatives like No Paper Day & Printer Policy along with Tree Plantation Drives & Sapling Sale.
? Recently a lot has been said about data safety and protection. The Information Technology Act, 2000(IT Act) covers many aspects that Tech Mahindra deals with. Unethical hacking, tampering with source documents, receiving stolen communication devices, using unauthorized passwords, failure to maintain records are just some of the instances the law seeks to look after. Although, Tech Mahindra has not been involved in any such case, it surely needs to take care of such laws.
? In 2017, Tech Mahindra in Hyderabad faced serious allegations of unlawful retrenchments of software engineers employed by the firm. Many IT firms faced such allegations in the recent past. The company accepted its mistake and apologized for the same.
Infosys LTD: The company was established in 1981 and today it is the second largest exporter of software services from the country. It is known globally for its world class management practices and work ethics. The company is making consistent efforts to offer services like software development, maintenance, technology consulting, testing and project implementation. Infosys has its own delivery model through which it provides its services globally. The company not makes its employees happy through its work culture and other aspects but also keeps on innovating according to the needs of its consumers both in India and in the world.
Tata Consultancy services (TCS): TCS is the largest software company in Asia, having a wide range of offerings and catering to industries like banking and financial services, manufacturing, retail and telecom. The company was one of the pioneers of the much acclaimed global delivery model. It has the largest employee base (around 238,583). More no. of employees leads to more creativity, innovation and growth. On the other hand Tech Mahindra is younger than Infosys. It is a mid size Indian IT services company and has main focus on telecom service providers and telecom equipment manufacturers with not large employee base.
WIPRO: Wipro is India’s third-largest software services exporter and has diversified business interests, including, software development, hardware, consumer care and lighting and infrastructure engineering. Wipro’s IT services business has been consistently on the rise and has been the major driver of revenue and profit growth for the company. IT services business contributes around 77% of total revenues of the company. Between FY07 and FY12, the company grew its sales and profits at average annual rates of 20% and 14% respectively.
HCL Technologies: It is India’s fifth-largest software company. Its service offerings include technology-led services, enterprise consulting services, applications consulting services, ITES and infrastructure services. While the company has witnessed volatility in its core business, it has done well to grow its inorganic businesses. HCL Tech’s has a strong focus on BPO and is the third-largest BPO services provider in India, as per NASSCOM latest rankings.
Environmental Factor Variables Impact
Political Political factors like EOUs & STPs support IT companies like Tech Mahindra along with regional benefits of rebate.
Economic Corporate Tax cut down with SEZs encourages tax benefits while inflation plays no to little role, global economic slowdown is not a good sign for anyone.
Socio-Cultural While a Section prefers traditional method. Major section is in favour of going digital. Tech Mahindras CSR works even harder to make it better.
Technological IOT, Java, Cloud, SMART to name a few with its capability to innovate and adopt new technology fast.
Ecological E-waste is a major concern with power consumption included although the company is trying its best.
Legal Company faces many legal laws with regards to data and cyber safety but it isnt involved in any such cases till yet except an HR one.
Competitors Big competitors like Infosys, WIPRO, HCL tech and TCS.
Customers B2B business hence agreements are made which means long term customers.
Chapter 6: CSR
CSR POLICIES OF TECH MAHINDRA
Tech Mahindra limited is a socially responsible company, since inception. It has been contributing 1.5% of its PAT for CSR activities, to benefit the socially and economically disadvantaged communities. This is done by consistent investment in programmes of Education for the underprivileged and the differently abled people. Tech Mahindra is also venturing into higher education by setting up it institutions known as Mahindra educational institutions.
Tech Mahindra has a CSR Vision :
EMPOWERMENT THROUGH EDUCATION
For Tech Mahindra Limited, Corporate Social Responsibility means responsible business practices with the involvement of all the stake holders in decision making and operational activities. It entails having business policies that are ethical, equitable, environmentally conscious, gender sensitive, and sensitive towards the underprivileged and differently abled.
Tech Mahindra Limited commits itself to sustainable transformation and social integration.
TMF, has vibrant and innovative partnerships with the government, NGOs, CBOs and other organizations, that will promote quality education and employability for vulnerable sections of society.
OBJECTIVES OF THE POLICY :
To demonstrate the commitment to the common good.
Actively support and be part of the states development agenda to ensure sustainable change.
Set high standards of quality in the delivery of services in the social sector.
Engender a sense of empathy and equity among employees of TML.
Currently Tech Mahindra Ltd mainly focus on promotion of Education in terms of CSR focus area. Within this broad theme specific areas such as school education, education for employment, and technical education are included. Womens Empowerment and disabled people are sub-themes in these focus areas. TML prioritize to reach the underserved segments of the population like women, economically and geographically disadvantaged, and vulnerable and marginalized population. The company also lays emphasis on employee volunteering in all its CSR efforts to generate a feeling of empathy in them towards the society.
TMF believes that Education is the tool for creating an empowered, enlightened society capable of rising to its full potential. Quality Education for all classes is the way to ensure an equitable and just social system and therefore, the company is working to make this quality education available to all the sections of society.
The quality of school education is now increasingly being assessed in terms of the multi-dimensional performance profiles and personality traits of students. Candidates are expected to have independent learning, problem solving and decision making abilities to be able to enroll in the higher & speacilzed education or employment sectors.
The Foundation, with a commitment to quality and equitable education opportunities for all, works to empower disadvantaged children through education, creation of an enabling environment that encourages children to come to school and reduce dropouts, and provide knowledge that facilitates improved learning for bringing a systemic change in schooling.
With that objective, the TML has identified the following thrust areas:
Whole School improvement
Capacity building of teachers
The Foundation will work on all of the above areas with special emphasis on school development programmes and teacher training to bring in a systemic social change.
Other than this, in accordance with the Government of Indias vision and policy on skill development, the TML is also working to enable the youth to acquire employable market-oriented skills and links them to potential employers, thereby facilitating the development of self-reliant and confident individuals.
Not only this, TMF seeks to give dignity and independence to disabled people through inclusive education, providing employable market-related entrepreneurial skills, and opportunities, thereby allowing them to be self-reliant.
These are some initiatives taken by Tech Mahindra Limited as their corporate social responsibility. And they are working consistently and sincerely for fulfilling these responsibilities.