Written Analysis and Communication

(WAC)

Assignment-4

ArcellorMittal in India : Sustainable Partnership Model

Submitted To: Submitted By:
Prof. Manaswini Acharya 15PGDM069

EXECUTIVE SUMMARY
ArcellorMittal came to India with mission to expand but in a sustainable way. In order to improve its visibility in India it partnered with Ministry of Environment and Forests (MoEF) and Centre for Environmental Education(CEE) to launch one of the largest projects of social responsibility of teaching environment education to school children. The project was highly penetrative but lacked qualitative and quantitative testing. With only three months left for completion, the company faces the issue of deciding the way forward with the project taking the budget, brand image, stakeholders and outcomes into consideration. After a detailed analysis, it is recommended to Mr. Ritesh Sinha, The head of CR, to extend the project timeline by two more years and bring about qualitative improvements in the project to better its effectiveness.

Table of Contents

Serial No. Contents Page No.

1 Situation Analysis 1

2 Problem Statement 2

3 Options 2

4 Criteria for evaluation 3

5 Evaluations of options 3

6 Recommendations 4

7 Action Plan 4

8 Contingency Plan 5

SITUATIONAL ANALYSIS The world’s largest steel and mining company, ArcellorMittal, entered the Indian market in 2006 with plans of expansion and growth. ArcelorMittal believed that ‘Doing right is the only way of doing well.’ ArcellorMittal thus used to take up task of social and economic development in the areas where it conducted its business operations. For this it even set up a non-profit foundation named ArcellorMittal Foundation in 2007. It initiated many community development projects in Jharkhand, Odisha and Karnataka initially.
Keeping in line with its mission and vision it partnered with Ministry of Environment and Forests(MoEF) and CEE to launch the world’s largest project of corporate climate change and social responsibility. By forging ahead with this partnership, ArcelorMittal wanted to improve its visibility in India.

The Project : The project aimed at imparting environment education to the students of more than 2 lac schools. This was to be done in a systematic way which constituted of programs like setting up of ecoclubs, selection of Paryavaram Mitras (PM), choosing Paryavaran Ambassador through the program Kaun Banega Paryavaran Ambassador (KBPA) and providing and reviewing resource materials to both teachers and students.

Roles: MoEF was given the role of establishing contact with various concerned departments at central and state levels. It was also responsible for guiding the smooth functioning, media exposure and providing manpower.
ArcelorMittal was responsible for providing and reviewing resource materials, interacting with stakeholders, monitoring the execution, involvement in project’s design and providing financial assistance. ArcellorMittal had to provide a monetary support of approx 90 Million INR.
CEE was the implementer of the project. Its task was guiding the schools and monitoring the progress.

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Impact: Mr A P J Abdul Klam was seleced the Paryavaran Ambassador. Because of the partenship between the big three, the project was able to reach to the most rural and remotest of areas. First year(2010-2011) saw distribution of environment education module for the students of 1,20,000 schools. In the second year the allocation of funds for the material development was increased and modules for the teachers were distributed. The project reach was fairly good.

The Dilemma
Only a few months are left for project completion and the Head of CR of ArcellorMittal, Mr. Ritesh Sinha is in a fix of how to quantitatively and qualitatively measure the success of the project, whether to close down the project as scheduled or to continue it for a couple of years. And how to bring about qualitative improvement in the way the environmental education is imparted.

PROBLEM STATEMENT

The decision Mr. Sinha should take for improving and quantifying the effectiveness of the CR project within various constraints.

OPTIONS

1. Extend the project timeline for two years and bring about qualitative changes in the project. 2. Extend the project for two more years but reduce the company spending on it substantially. 3. Close the project as scheduled but serve as a monitor and look after its proper implementation on a regular basis. 4. Simply wind up the project as per schedule.

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CRITERIA FOR EVALUATION 1. The Cost to company 2. The effect on brand image 3. The impact on the various stakeholders.
EVALUATION OF OPTIONS

OPTION 1: Extend the project timeline for two years and bring about qualitative changes in the project.

* Criteria 1 : Extending the project timeline for two more years and bringing about a qualitative change is the project structure and materials will require additional amount of funds to be pumped in. * Criteria 2 : This will affect the brand image of ArcellorMittal positively * Criteria 3 : The additional funding required might raise a concern for the stakeholders of the company. But the kind of reputation earned by the company can prove to be beneficial for it in future for clearances, etc.

OPTION 2: Extend the project for two more years but reduce the company spending on it substantially.

* Criteria 1 : The project will be extended for two more years but the expenditure will be reduced substantially and thus the way it will impact the company’s finances will not be that great. But this will lead to a lower focus on quality of material development. * Criteria 2 : This option will lead to a mixed effect on the brand image of the company. * Criteria 3 : This option will keep the stakeholders happy as they don’t need to worry about the additional funds.

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OPTION 3: Close the project as scheduled but serve as a monitor and look after its proper implementation on a regular basis.

* Criteria 1 : Closing the project as scheduled will save additional funds that might have been required to run it further. The mentoring from outside can be easily accomplished on funds that the company spends for CSR activities. * Criteria 2 : The brand Image of the company remains intact as even after closing down of the project it continues to monitor and mentor the implementation from outside. * Criteria 3 : The stakeholders will have no problems with this option as not much input from the company is needed as already discussed in criteria 1.

OPTION 4 : Wind up the project as per schedule.

* Criteria 1: The winding up of the project will save any additional money that the company might have spent if it had continued. * Criteria 2 : This will negatively affect the brand image of the company as it won’t be perceived as one having values and social responsibility attitude. * Criteria 3 ; This will not raise any issue for the stakeholders but the negative effect on the brand image might raise some eyebrows.

RECOMMENDATION

Keeping in mind the present scenario, my recommendation for Mr. Sinha will be to go with Option 1.

ACTION PLAN * Communicate to the MoEF and the CEE about the extension of the project in the favour of the students and other beneficiaries.
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* Look to it that there is a proper allocation of funds for the project and arrange for additional funds. * Plans should be made to develop tools to assess and quantify the effectiveness of the project. * The partners for the project must be encouraged to increase their participation in meetings and strategy formulation for the project.

CONTINGENCY PLAN

Option 2 can be used as a contingency plan.

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