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Sustainability is a critical issue for businesses to consider not just in the United States but internationally as well.
George Joseph, an assistant professor of accounting in the College of Management, will travel to India to research Tata Steel, a division of one of India's largest companies, and how it incorporates sustainability in its business practices. To conduct the work, Joseph has been awarded a grant from the Institute of Management Accountants’ Foundation for Applied Research.
Tata Steel, ranked 315 on the Fortune 500, is part of the Tata Business House (family-owned operations are known as “business houses” in India), which has holdings that range from automobile makers (Tata Motors recently bought Jaguar and Land Rover from Ford) to information technology (Tata Consultancy Services employs thousands of high-tech workers globally, including in the U.S.) to hotels (that division bought Boston’s Ritz-Carlton in 2002 and renamed it the Taj-Boston).
“Tata Steel is highly regarded for its pioneering endeavors in corporate social responsibility, now combined with modern management techniques, efficiency and productivity,” explains Joseph.
The company voluntarily provides sustainability reports that offer detailed measurements of environmental, social and economic impacts on areas such as air and water quality, labor relations, safety regulations and economic development.
“These factors are important for all economies, and particularly so in developing countries, where corporate decisions can more directly affect the lives and livelihoods of numerous individuals,” says Joseph. “Tata Steel's enlightened sustainable practices make them a benchmark firm in the area of sustainability and therefore, an important study.”
Accounting for sustainability efforts, Joseph says, offers stakeholders an opportunity to see how companies perform socially, environmentally and economically. For publicly traded companies with shareholders concerned with profits, making the case that sustainability is good for business is important.
“Management accounting can play an important role in presenting the business case by enabling firms to see how a ‘sustainability strategy’ can contribute to the financial bottom line,” he says.
To achieve long-term credibility of sustainability reporting, measures that are auditable will need to be developed, which is something that accountants specialize in, according to Joseph.
The professor first worked with Tata in 1988 as an employee for a short time before entering academia. He returned to the company to visit two years ago to collect data through interviews and other sources for articles in accounting journals.
Joseph was notified this summer that he was receiving the IMA grant to primarily cover travel expenses and some research support. Joseph’s research “will have the potential to make a contribution to the profession,” according to the IMA, which is interested in areas like sustainability and globalization. The accounting tools he develops may be applicable for other companies. His work with Tata Steel offers an opening in a developing country for UMass Lowell to provide expertise to companies with growing international influence.
“India has many business opportunities for firms looking for markets, management and technical skills, and, more recently, research and development,” says Joseph. “While there are cultural barriers to working in India, the environment has changed rapidly in recent years, with greater openness and access to opportunities for a variety of experiences.”
His research will also benefit UMass Lowell students.
“In the College of Management generally, and the Accounting Department in particular, it is important that our faculty keep current with the new trends, regulations and methodologies that are affecting today’s business entities,” said J. Stephen Collins, department chair. “Obtaining grant funds and using them for research and travel is one way that our instructors can learn about these changes firsthand and bring them back to the classroom for the benefit of our students.”
Joseph plans to complete the preliminary draft of a case study on his research at Tata Steel for publication in an IMA journal by August 2009.