environmental management as strategy-the case of sil

7/31/2019 Environmental Management as Strategy-The Case of SIL

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Environmental Management as Strategy:

The Case of Scooters India Ltd.

A.SahayAbstract

The Corporate world is getting littered with corpses of all hues, colours and sizes. Someface sudden death while some others are kept on oxygen for long time before dying.While some die for economic reasons, some others face closure because ofenvironmental mismanagement. Scooters India Ltd. had both the economic andenvironmental diseases and was declared a mortuary case only to be given ceremonialburial but it staged a smart turnaround because of a nice amalgamation of strategiceconomic and environmental actions. It innovated products and processes and took toGreening the Management. The present article, after giving briefly the status of IndianAutomobile Industry and Environmental issues therein, describes how EnvironmentalManagement as a Strategy adopted by the company not only helped its miraculousturnaround but also ensured its sustainability. The case clearly proves thatEnvironmental Management is not only for big companies but can be practiced equallysuccessfully by mid size industries as well.

Introduction

Indian Industries are relatively young and Environmental Management younger.Countrys industrialization policy looked inward and concentrated on import substitutionrather than export led growth. There was centralized planning on the pattern of erstwhilesocialistic world. Public sector was assigned greater role and perceived as the enginefor growth though mixed economy was the enunciated policy. Private sector units notdoing well were nationalized, the main consideration being the protection of jobs. Soonit was apparent that the propounded policy was not working and that public sector was

not able to cater to the growth expectations of modern India. In the last decade, theindustrial policy took a U turn. Privatization became the new mantra for economicgrowth and in pursuance thereof many Public sector Units (PSUs) were put on the block(Singh, 1999). Chanting privatization mantra was easier but implementing it was anightmare because of political and social issues. The fall out of privatization exercisemade the mandarins of PSU pull up their socks which resulted in considerableimprovement in their performance. Thatcher era debate as to how wise it was to sell thefamily silver is still going on but the Government has been pursuing the policy ofprivatization of PSUs, keeping in mind political exigencies, with limited success.Privatization has been further necessitated because of the new WTO regime. IndianCompanies first took to quality standards like ISO 9000, QS 9000 etc but with

Environmental legislation coming one after another and the Environmentalists gettingactive; they were obliged to meet all the legislative requirements if they were to continuetheir operations. There seems to be shift in the policy of privatization with the newgovernment taking oath of office but there has been no relaxation in the pursuit ofEnvironmental objectives and goals.

Bhopal disaster (Rahman, 1992) in December 1984 made a paradigm shift inEnvironmental and safety issues. It exposed the environmental fragility of companies aswell as differential Environmental behavior of multinationals. It threw a new challenge to


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the country with respect to Environmental legislation, governance and enforcement.Though Environmental laws existed prior to this disaster (legislation began in 1974itself), Indian Parliament enacted a comprehensive law called Environment (Protection)Act, (1986). Under the Act new rules and regulations are being framed from time to timewhich business and industry are obliged to meet. Some of the important Environmental

rules and regulations framed thereafter are Hazardous Wastes (Management andHandling) Rules (1989), Central Motor Vehicles Rules (1989), Public liability InsuranceAct,(1991), Bio-Medical Waste (Management and Handling) Rules,(1998), Manufacture,Storage & Import of hazardous chemical Rules, (1989), Recycled plastics manufactureand usage Rules,(1999), The ozone depleting substances (Regulation and Control)Rules,(2000), Noise Pollution (Regulation and control) Rules,(2000), The Municipalsolid wastes (Management and Handling) Rules, (2000), The Batteries(Managementand Handling) Rules, (2001),Forest (Conservation) Rules,(2003), etc.

Companies, in the new Environmental and Ecological regime, found it meaningful to getISO 14001 certification which obliges them to at least meet all legislative requirementsand install an Environmental Management System (EMS) because of emerging

legislation, rules and regulations. Indian industries (more than 800 units have got ISO14001 certification) are no different in their motivation for formulation, implementationand maintenance of EMS compared to industries in developed countries for whommeeting legal requirements was the first reason for formulation and implementation ofEMS. The prevention of prosecution and adhering to the industry/sector norms camenext. Customer demand, financial markets and social pressure are still of lower priority.Notwithstanding, there are a few companies which are aiming at EnvironmentalExcellence. The current status of Indian Corporates (Sahay, 2004) shows that theregulatory mechanism has failed to control Industrial and vehicular pollution. This isbecause the policies and institutions controlling pollution are weak and proper marketmechanism has yet to be in place.

Pollution is rising rapidly with economic growth and has already reached unbearableproportions as it happened in the industrialised countries in 1950s and 1960s, within adecade or so of the World War. The economic boom was environmental bane. Ifpollution grows at this rate, there is bound to be public protests, and given the spacethat Indian democracy provides, either the politicians or the courts will have to respond.Community and civil society protests and judicial activism are already biting theindustries. Indian Supreme Court has actively intervened in many environmental issueson pubic complaints (at times sue motto). In such a situation, industries find theirinvestment most threatened. Therefore, for a country like India, it is in the industry's owninterest to adopt a proactive role in environmental management.

Sustainability: A Strategic IssueApart from the Annual Report, companies have started publishing Sustainability Reportwhich provides companys environmental policy and its implementation status.Corporate Sustainability is a business approach that creates long-term shareholdervalue by embracing opportunities and managing risks from economic, environmentaland social developments. Corporate sustainability leaders achieve long-termshareholder value by gearing their strategies to harness the markets potential forsustainability products and services while at the same time successfully reducing and


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avoiding sustainability costs and risks. Leading sustainability companies display highlevels of competence in addressing global and industry challenges in variety of areas.Their strategy is to integrate long-term economic, environmental and social aspects intheir business while maintaining global competitiveness and brand reputation.

The sustainability reporting varies from organization to organization making it difficult for

the stakeholders to evaluate the company for their investment and other decisions.Various reporting methods have been propounded from time to time by differentagencies. Important among them are Responsible Care 1988, Coalition forEnvironmentally Responsible Economies 1989, ICC Business Charter1990, GlobalEnvironmental Management Initiative (GEMI) 1990, The CBI Environment BusinessForum 1992, Rio Business and Industry Agenda 1992, European Eco-Managementand Audit Scheme (EMAS) 1992, ISO 14031, European Chemical Industry Council(ECIC) 1993, Global Environmental Charter 1993, Public Environmental ReportingInitiative (PERI) 1993, The World Council for Industry and the Environment (WICE),World Business Council for Sustainable Development (WBCSD) 1995, ACBE Guide1997, Guide to Environmental and Energy Reporting and Accounting I997, Declaration

of Intentions and Global Reporting Initiative (GRI) 2002.Global Reporting Initiative (GRI) is a multi-stakeholder process that, of late, is gainingacceptability worldwide. It is an independent institution whose mission is to develop anddisseminate globally applicable Sustainability Reporting Guidelines. These Guidelinesare voluntary in nature but is getting popular among organizations for reporting on theeconomic, environmental, and social dimensions of their activities, products, andservices. The GRI incorporates the active participation of representatives from business,accountancy, investment, environmental, human rights and labour organizations fromaround the world. Started in 1997 by the Coalition for Environmentally ResponsibleEconomies (CERES), the GRI became independent in 2002. GRI report has nowbecome a strategic tool for communicating companys commitment and performance on

Environmental parameters.

Indian Automobile Industry & Exhaust Emission

Following the economic liberalization in India in 1991, the ownership and utilization ofmotor vehicles are growing rapidly. The ever-increasing trend in the sales of motorvehicles during different periods would substantiate the above statement. The totalnumber of motor vehicles sold in 1983/84 was 0.99 million, which increased to 2.02million in 1991/92, and in 1996/97 the number shot up further to 3.97 million indicatinga compound average growth rate of 14.4% during 1991/92-1996/97 as compared to9.4% during 1983/84 -1991/92. In the 1998 to 2000 further 12.24 million vehicles wereadded (SIAM, 2001). One noticeable feature about the growth in motor vehicle

population, however, is that it has not been even across all categories; personalizedmodes of transport (i.e. two-wheelers and cars/jeeps) have dominated in this growth,For instance in Delhi, two-wheelers and cars/jeep account for more than 90% ofregistered motor vehicles. On the other hand, the share of registered buses theprimary mode of public transport (recently metro has been introduced) in Delhi is aninsignificant 1% of the total vehicles in Delhi. Similar is the trend for other metropolitancities. There are many reasons for the increase in motorization. The most prominentreasons are the growth in income per capita and the growth in urbanization. The easy


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availability of loan has made the urban youth spend his future income as well onmotorisation.

The growing level of motorization in urban areas with poor traffic management strategyand inadequate separation among working, living, and moving space on major corridorshave resulted in traffic congestion leading to longer travel time, extra fuel consumption,

and associated air pollution problems. The problem is further compounded by the largeshare of poorly maintained old vehicles, sizeable share of inefficient two-stroke engines,and uncontrolled emissions from diesel-engine buses plying on city corridors using poorquality fuel. According to the air quality monitoring data of the CPCB (Central PollutionControl Board), in at least 48 cities, particulate matter (PM) concentrations exceed theannual residential limit of 140, ug/m3 (CPCB 1995). Six of the ten largest cities in India Mumbai, Calcutta, Delhi, Ahmedabad, Kanpur, and Nagpur have annual average PMlevels at least three times higher than the World Health Organization (WHO) standards.While only a few cities have high concentrations of NOx and SO2, this picture is boundto worsen with growing industrialization and motorization. Further, the environmentalimpact of PM and NOx emissions from current uncontrolled diesel engines is higher

compared to that of the emissions from gasoline engines equipped with catalyticconverter. Also, it is well known that the most serious health risks arise from exposureto PM. Adverse health effects from inhaling PM depend not only on the mass but alsoon the size of the particles. Smaller particles penetrate deeper into the respiratory tractand can be more toxic and injurious to heath.

In terms of health impacts of air pollution, barring one or two studies, there is very littleepidemiological research in India, and one has to rely on back-of-the-envelopeestimates. Dose-response functions from developed countries to estimate mortality andmorbidity due to ambient air quality exceeding the WHO guidelines in 36 Indian citieswas studied earlier in which the pollutants PM, SO2, NOx and lead were considered. Thereport stated that over 40,000 premature deaths would be avoided if pollutant levels in

these cities were reduced to the WHO annual average standard. A more rigorous andcomprehensive study by Tata Energy Research Institute (TERI), which considered moresources of pollution and the entire country, including rural areas, estimated that 2.5million premature deaths takes place in the country as a whole due to air pollution. TERI,later, brought out a nice report Cleaner is Cheaper : Case Studies of CorporateEnvironmental Excellence in which Corporate Social Responsibility actions highlightingEnvironmental Management systems of some of the Corporate houses wasmagnificently dealt with (Narang et al, 2003).

2 and 3 Wheeler segment of Auto Industry in IndiaThe Indian economy was closely regulated and controlled till late 1980s. One of the key

success factors for an organization in the regulated economy of pre -1990 was to getlicense from different ministries and obstruct the issuance of license to any of thepresent or potential competitors. Government tightly controlled capacity expansion andfirms truly enjoyed a sellers market. Domestic production capacity in the country wasunable to match the demand and imports were extremely difficult. Indian AutomobileIndustry is divided into Heavy, Medium and Light Commercial Vehicle, MultiutilityVehicle, Car and 2-Wheeler & 3-Wheeler. Soon after independence, AutomobileProducts of India was granted a license to produce scooters in the country. The


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company had technical collaboration with the then Innocenti of Milan, Italy. It was theonly manufacturer of two wheelers in India till 1960. Bajaj Auto Ltd.(BAL) was the nextto enter two wheelers and three wheelers industry. BAL has been the market leader inthe scooter market since then. However, the market leadership position in the twowheeler segment (which also includes motor cycles) went to Hero Honda in 2001.

Scooters India Ltd. (SIL) was granted a license in 1973 to manufacture 100,000scooters per anum. It started production in 1975. Karnataka Scooters Limited andAndhra Pradesh Scooters Limited, who were using SIL manufactured engine, startedproduction in 1976. The competitive environment changed significantly in the mid 80s.Lohia Machines Limited (LML) started production of scooters in 1984 in collaborationwith Piaggio of Italy. Kinetic Honda started scooter production in 1986 in technicalcollaboration with Honda Motors Limited, Japan. Gujarat Narmada Auto Limited, asubsidiary of Gujarat Narmada Fertilizer Corporation, started scooters production in1987 but could not sustain the activities and was finally liquidated in 1997. From thesecond half of the 1980s, the market started becoming a buyers market. The marketstructure changed significantly in the 1990s. The launch of fuel efficient and trendy

motorcycles in foreign collaboration by BAL, Hero-Honda, TVS and Escorts changedthe market scenario for two wheelers in India resulting in sea change in demand pattern.While the growth rate of the motor cycle has remained in double digits during the lastdecade, it has shown a declining trend for scooters (SIL, 1992).The concept of a three wheeler vehicle came from Europe. Mediterranean Europe hadits maximum use but today Asia is the leader in 3-Wheelers. India is the second largestproducer of three wheeler vehicles in the world, behind China (Nathalie Ladler, 1996;Bajaj Auto Limited, HBR case No. 9-593-97). These were earlier mostly three seaters.Three wheeler vehicles is used for multiple purposes. In India, it is commonly used aspassenger carriers for short distances. These carriers could be point-to-point taxies withlarger space inside to accommodate 6-8 persons comfortably or it could be smaller

rickshaws with 3-4 passengers carrying capacity to meet specific travel needs ofpassengers. While the smaller versions are generally fitted with petrol engines, largerpassenger carriers are mostly fitted with diesel engines. Of late, they come with enginescapable of running on CNG which causes lesser pollution. Three wheeler operations inIndia are characterized by the following:1. Operation of a 3-wheeler taxi within the municipal limits of cities is decided by state

government agencies. Traffic movement, public convenience, environmental factors,and political factors influence the local administration.

2. The taxi operators are generally from lower income groups who often invest all theirsavings to buy these taxies which are the medium for earning.

3. Passengers are predominantly from middle income or lower middle income groups.They use the three-wheeler taxies for their convenience, availability and low cost.Hence, low operational cost of the vehicle is important to compete effectively withother modes of public transport such as buses. Subsidized pricing policy of diesel bythe government has made the diesel model of three wheeler taxies more popular.

4. Since the late 1990s, there is growing concern for environmental degradationcaused by motor vehicles. In some of the cities including Lucknow, the home of SIL,restrictions have been imposed on the movement of diesel taxies.


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These characteristics of 3 wheelers and the environmental regulation put twin pressureon three wheeler manufacturers. First, they have to keep price and operating cost ofvehicle low. Second, they have to be equipped for growing environmental concerns.Companies are responding to environmental concerns by upgrading the technology andusing alternate fuels. Subsidized price of diesel in India provides low operating cost for

such vehicles.The competition in 3-Wheeler sector is becoming intense with the entry of PiaggioGreaves Vehicles Ltd (PGVL), Mahindra and Mahindra (M&M) and Bajaj Tempo Ltd(BTL). Besides these 3 major new entrants, some small sector units are also playing inthe field. In response to intense competition and new exhaust emissions regulations,SIL developed low-emission CNG version as well as zero-emission battery drivenVikram EV in late 90s. SIL gained from experience in Kathmandu where the company'sdiesel three wheelers were being converted into battery driven vehicles by someAmerican Consultants. SIL manufactured and marketed world's first zero emissionbattery driven 3 wheeler. The then President of USA, Mr. Bill Clinton appreciated thezero-emission vehicle when he visited Tajmahal in Agra on the Earth Day, the 22nd

March, 2000 from where he had addressed the world. Following on the heels, M&Malso developed a battery operated three wheeler and put on trials. BAL, too, hasdemonstrated an electrically operated 3 seater 3-Wheeler but has been playing on lowkey. Due to courts intervention, only CNG powered and battery driven electric 3-Wheelers are registered in Delhi. With so many constraints and easy productsubstitution, the growth of three-wheeler market is uncertain, more so because ofenvironmental issues. This has adversely affected the demand, which was earlierincreasing continuously at a rate of 30 to 40 percent. None the less the vehicles runningon alternate fuels are expected to remain in demand.

Scooters India Ltd. (SIL)

The then Prime Minister, Mrs. Indira Gandhi had laid the foundation of the plant on April8, 1973 at Lucknow, the capital of Uttar Pradesh, the largest state of India. Lucknowhad little industrialization and inadequate infrastructure of roads, telecommunication andpower. The company was created as a joint venture between Govt. of India, Innocenti ofItaly and API, a private sector automobile company located in Bombay. API withdrewfrom the joint venture in July 1973 because of conflicts related to three wheeler projectand payment to API for its technical services and Innocenti got liquidated in Italy. Theshare capital to be provided by them was raised through public subscription a uniqueexperiment by Govt. of India.The operations started with massive recruitment of people meant for full capacity of100,000 scooters. Selection of employees was unplanned, many persons with similarexpertise were selected and skill in many areas was lacking. Casual labour fromneighbouring areas was initially called to open cases containing plant and machinerythat had arrived from Italy. Subsequently, they became regular employees. Most ofthem were illiterate having little idea of quality or ecology. SIL planned to manufacture30,000 scooters in 1974, the first year of operation, 60,000 in 1975 and 100,000 from1976 onwards. The company entered into agreements with seven manufacturing unitsin different Indian states during 1973-74 to supply 100,000 power packs (a compact unitconsisting of engine and gearbox). The first prototype of the scooter was ready in


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November 1974. Testing of the scooter by Vehicle Research and DevelopmentEstablishment (VRDE) reported technical problems regarding inferior quality ofcomponents. SIL had to source these components from distantly located suppliers.Frequently these supplies, whose rejection would adversely affect the productiontargets, did not meet specifications. Not withstanding, SIL started commercial

production in February 1975. It simultaneously started the process to set up ancillariesand in-house production facilities. SIL established a foundry and a forge shop in thefactory premises for internal consumption little knowing that these will become botheconomic and environmental burden in time to come.The initial enthusiasm and challenge of commissioning evaporated fast with the failureof the first product (scooter) - Vijay Deluxe. Products after products were launched withincremental innovation but they failed at the market place. Production declined sharplyafter 1985-86 when new collaborative products started appearing in Indian market. Thetools, dies and fixtures were worn out and the products were substandard both in termsof quality as well as exhaust emissions (this factor became strategic later). Supplierswere hesitant to supply good quality components on normal business terms and

conditions. Local media, too, became hostile due to poor performance of the companyand its products. Most of the board meetings were rituals. From 1986 onwards, noworthwhile discussion took place in those meetings. They were organized primarily tomeet the requirements of the Companies Act and conducted in New Delhi the seat ofthe Govt. rather than at the place of action. The purpose of these meetings got reducedto the CEO seeking help of the government nominee directors to get fresh loansapproved by the government. Slowly rumours of possible closure of the companystarted spreading. The period from 1987 till 1992 was one of great industrial unrest.There was very little concern for production as sales of the product were extremelydifficult (Kumar, 1996). SIL reported a loss of Rs. 404 million on sale of Rs. 103 millionin 1989-90. The accumulated loss stood at Rs. 2125 million. The operational loss further

went up to Rs. 613 million and accumulated loss to Rs. 3605 million on a sale of 236million when the company was referred to Bureau of Industrial and FinancialReconstruction (BIFR) in 1992 which provides protection similar to Bankruptcy Court.

SIL, having been referred to BIFR and getting protection under Sick Industrial CompanyAct (SICA 1991), immediately formed a strategic planning and implementation group.The Strategic group started working on full throttle and the first document it producedwas the radar map (Fig.1) for automotive engine needed for its product. The documenton the course to be followed by the Company for its survival and growth was the next.They presented the future automobile scenario that clearly brought the environmentalissues that the companys products and processes were facing. The information wasshared with every level of the organisation, right from the workers to the topmanagement. Later the issues were discussed at Board level. The environmentalaspects and impacts of the operations in the factory premises came were consideredfirst as they were essential for running of the factory. Equally important was the productstrategy especially exhaust emission but it needed change in engine design whichcalled for huge investment. Revival Plan of the Company (1992-96), which centeredaround products and processes, recommended following strategic actions.

respect environmental legislation and enforcement actions


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make the products and processes environment friendly develop confidence in employees that the company could be revived improve industrial relations get support of ministry officials, union leaders, and employees

improve the finances of the company improve quality and cost efficiency of products bring customer focus in all operations of the company

Though on record, the Group of Ministers in 1992 gave a lease of life to the company,the real cause of turnaround (Fig.2) was on account of the change in mindset ofemployees that came through rigorous training that was imparted to them in the journeytowards ISO 9000 and ISO 14000. During the period under reference to BIFR, theBoard of Directors kept a close watch on the performance of SIL. They were morevigilant and inquisitive, especially about quality and environmental aspects of theoperations of the factory as well as environmental performance of the products. SIL's

R&D team had played a significant role in changing product line from scooter to 3-Wheeler and imbibing environmental aspects in the products right at the design stage.The company pushed the production and sale of three-wheelers and its revenue startedmoving northwards. The strategic group, however, remained busy working out emergingfuture scenarios and strategic action plan to meet the challenges external environmentwas bringing. It was obvious that SIL had to develop its environmental policy and takeseriously to Environmental Management, which become the key factor in its Turnaround.Though getting ISO 14000 certification took some time, Companys EnvironmentalPolicy (Annexure-1) was already in place. All the employees, suppliers and dealerswere working to achieve environmental targets along with productivity, quality and salestargets. The Company was rated highly by Center of Science and Environment (2001)

for its environmental performance in automobile sector. Later the CEO was declared theEnvironmental Chief Executive of the year by Wisitex.

Environmental Actions taken by SIL

The strategic group had identified environmental actions on three fronts:1. People2. Product and3. ProcessIt was observed that not only the employees but all stakeholders were unmindful of theenvironmental issues that the company was confronting one after another. The CEO ofthe company had discussed informally the issues with directors, dealers and bankers.No one in the beginning gave any heed to what environmental legislation andenforcement coupled with changed customer preferences was coming. It was evidentthat our operations will get completely paralysed; leave aside the task of Turnaround.Central Motor Vehicles Rules (CMVR), 1989 had already come in force but thecompany had to continue selling its products even when they were not meeting exhaustemission norms. The motor vehicle registering authorities, too, were merrily registeringthese 3-Wheelers. This was because of no dissemination or insufficient dissemination ofknowledge about the new rules. The manufacturing process front within the company


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was worse as Environmental Pollution Act (1986) was already in force and many of theprocesses had pollutants beyond permissible limits. The factory was carrying on variousprocesses like melting, shot blasting, welding, spray painting, heat treatment etc. whichresulted in air, water and land pollution much beyond the permissible limits provided inthe Act. The most sensitive was the salt bath (cyanide) process for heat treatment. The

state pollution control board had raised the issue a number of times but it could bepersuaded not to take any punitive action. The factorys operations, however, cameunder close scrutiny by the Pollution Control Board as the courts started hearing publicinterest litigations and resorted to strong judicial actions. In one of such actions the HighCourt of Allahabad, Lucknow Bench banned plying of Companys 3-Wheelers inLucknow. This was a wake up call for the management, employees and all otherstakeholders. The Company had to pull up its socks and remedy the poor environmentalperformance immediately.

The strategic group identified people as the first and foremost factor in making thecompany Environmental friendly and accordingly every one was trained in

Environmental aspects and impacts of companys operations, especially those in hisarea of operation. Many employees were given higher level of training. The CEO had tolead from the front. He underwent Advanced Lead Auditors Course in EnvironmentalManagement Systems. There was change of mindset and a fresh breeze was blowingacross the company making everyone worry and act to make companys processes andproducts environment friendly. While taking stock of the situation, it was observed that anumber of Acts and Rules (Table 1) were applicable to the company many of whichwere not being complied. The action started from the scrap yard. Foundry, Die Casting,Forging were on the firing line. Some immediate investment had to be made to complywith the pollution laws. Fume and dust extractors, hoods, dust bags, chimneys etc hadto be installed but the savings outstripped the expenditure. Paint shop and Heat

Treatment shops called for huge investments as the basic process itself had to bechanged. This required introduction of equipments with new technology. Machine Shop,Press Shop, structural Shop and Assembly line, too, required marginal investments.Auxiliaries and utilities required much support but they were brought to the desired levelof environmental performance with an in plant effort. With these actions taken, it wasobserved that the scrap yard started dwindling. As no separate environmental accountwas kept, it is difficult to say the return on environmental investments. However, theproduction (Fig.3) went on increasing. The losses started reducing and profits startedrising. The highest impact on productivity, cost reduction and consequent profit camefrom savings in material (Fig.4). The power and fuel consumption reduced (Fig.5)considerably. In fact, the experts, financial institutions and bankers never thought thatEnergy cost in a unit like ours, which was operating melting furnaces, could ever gobelow 4%. The manufacturing and operating costs (Fig.6) which includes indirectmaterial and overheads also showed a declining trend. The employee loved the newworking environment and showed their enthusiasm through their higher productivity andcreativity. Despite their salary and wages going up there was considerable reduction inemployee cost (Fig.7). The newly found creativity resulted in ever improving products.Vikram EV (Electric 3-Wheeler) was the result of this innovation and creativity. EvenPresident Clinton (Fig.8) admired this product during his visit to Tajmahal in India. The


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pursuit to environmental excellence made the strategic group to generate further ideasand create new businesses out of environmental requirements of future and companysstrength developed in the process of turn around. The future strategic opportunities aredepicted in Figure 9.

ConclusionScooters India Ltd. used Environmental Management as strategy for Turnaround. Itdiscovered in Environmental Management a strategic tool for its sustenance and growth.The action started for ISO 14000 certification, earlier perceived to be a financial burden,became a virtue as the company marched on its journey for revival. The case of SILmakes it clear that Environmental Management is a strategic tool for Businesssustenance and growth. The general belief that environmentalists are only a pain in theneck and add no value to the business is far from truth. Companies world over haverealized that good environmental management makes good economic sense. In fact fora start up and growth company, it is more va luable.Leave aside the regulators, there are customers who are green and are prepared to pay

more for green products as well as for products which are manufactured through greenprocesses. The myth that Environmental Management is applicable only to bigcompanies and that small and medium company can not afford this luxury is completelybroken from the case of SIL. People are getting green and forcing the governments toget green. The later have no option but to introduce green business laws and rules forthe future of earth as well as for their own survival and coming to power again. Greenpeople will always demand green products manufactured through green processes andin this lies the profitability as well as sustainability of the business.

References :

Centre for Science and Environment (CSE),2001,Green rating project :Environmental Rating of Indian Automobile Sector, New Delhi.

Central Motor Vehicles Rules, 1989

Dasgupta N, 1997, Environmental Accounting, Wheeler, New Delhi.

Ghobadian A, Viney H, Liu L and James P,1998,Extending Linear Approaches toMapping Corporate Environmental Behaviour, Business Strategy and theEnvironment 7:13-23

Jain A.K, 2001, Descriptive Law on Pollution and Environment, Akalank NewDelhi.

KPMG, 2002, International survey of corporate sustainability reporting, Universityof Amsterdam.

Narang R. K et al, 2003,Cleaner is Cheaper : Case Studies of CorporateEnvironmental Excellence, TERI, New Delhi.


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Rehman, S 1992, Lessons production managers can learn, Management Review21(2):58-67.

Sahay A, 2003, Environmental risks and relevance of insurance products, World

congress on environmental management, Palampur.

Sahay A, 2004, Environmental reporting by indian corporations, Corporate SocialResponsibility and Environmental Management,11,12-22.

Scooters India Limited, 1992, Revival Plan.

Sick Industrial Company (Amendment) Act, 1992

Singh P, 1999, Privatising Sick Public Undertaking, Mittal publications,New Delhi.

Society of Indian Automobile Manufacturers,2001 Inspection and Maintainancefor in - use Vehicles in India, GTTE Regional Workshop on Inspection andMaintenance Policy in Asia, Bangkok, Thailand.

Table 1 :Summary of Obligation & Responsibilities for Applicable Legislation

Sr.No.

YEAR ENVIRONMENTAL LEGISLATION

1 1974 The Water (Prevention and Control of Pollution) Act2 1975 The Water (Prevention and Control of Pollution) Rules3 1977 The Water (Prevention and Control of Pollution) Cess Act

4 1978 The Water (Prevention and Control of Pollution) Cess Rules5 1981 The Air (Prevention and Control of Pollution) Act

6 1982/1983 The Air (Prevention and Control of Pollution) Rules7 1986 The Environment (Protection) Act8 1986/2002 The Environment (Protection) Rules Amended up to 2002

9 1989/2000 The Hazardous Wastes (Management and Handling) Rules/Amendment Rules

10 1989/1994/2000

Manufacture, Storage and Import of Hazardous Chemical Rules/Amendment Rules

11 1991 The Public Liability Insurance Act

12 1991 The Public Liability Insurance Rules

13 1993/1996/1998

The Environmental (Protection) Rules- Environmental Statement

14 1993 The Environmental (Protection) Rules- Environmental Standards15 1994 The Environmental (Protection) Rules- Environmental Clearance

16 1995 The National Environmental Tribunal Act17 1997 Amendments in the Environment Protection Rules, 1994 Public

Hearing


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18 1997 National Environmental Appellate Authority Act19 1948 Factories Act

20 1950 U.P. Factory Rules21 1996/2000 The Chemical Accidents (Emergency Planning, Preparedness and

Response) Rules

22 1934 The Petroleum Act23 1981 The Gas Cylinder Rules

24 1976 The Petroleum Act (Amendment) Rules25 2000 Noise Pollution (Regulation and Control) Rules

26 2000 Ozone Depleting Substances (Regulation) Rules27 2001 Batteries (Management and Handling) Rules28 1980/2001

/2004The Central Motor Vehicles Rules (CMVR)

AUTOMOBIULE ENGINE - RADAR MAPPING

STRATEGIC VISION

2

STROKE

4-STROKE

LEV

ZEV

CNG/PROPANE

ELECTRIC/BATTERY

SOLAR FUEL CELLS

Figure 1


13/17


14/17

93-94 94-95 95-96 96-97 97-98 98-99 99-000

0.2

0.4

0.6

0.8

1.01.2

1.4

1.6Rs. IN BILLION

Rs. IN BILLION 29.74 50.8 86.6 120.68 131.28 133.86 138.54

SALES TURN OVER

0.29

0.50

0.86

1.201.31 1.33

1.38

Figure 3

65.02

55.97 54.0152.01 51.73 50.53 49.69

93-94 94-95 95-96 96-97 97-98 98-99 99-000

10

20

30

40

50

60

70

80%

% OF MATERIAL COST OF VALUE OF PRODUCTION

Figure 4


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6.1

4.02

3.23

2.572.91

3.252.8

93-94 94-95 95-96 96-97 97-98 98-99 99-000

1

2

3

4

5

6

7

%

% OF POWER & FUEL COST TO VALUE OF PRODUCTION

Figure 5

4.37

3.66

2.28 2.25

2.78 2.792.51

93-94 94-95 95-96 96-97 97-98 98-99 99-000

1

2

3

4

5 %

% OF MANF.& OPERATING COST TO VALUE OF PRODUCTION

Figure 6


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Figure 8 : President Clinton Inspecting Vikram EV on Earth day- 22nd March, 2000, outside Tajmahal, Agra

42.99

24.0220.82

14.7116.85

26.723.68

93-94 94-95 95-96 96-97 97-98 98-99 99-000

10

20

30

40

50

%

% OF EMPLOYEE COST TO VALUE OF PRODUCTION

Figure 7


17/17

SCOOTER

3 WHEELER

FRAME

MAGNETO

FOUNDRY

FORGING

COMPONENTS

ENGINE

DEALERSHIP

EXHAUST

(POLLUTION)EV

CNG

LPG

ENVIRONMENT

BATTERY

LEASING

BATTERY

CHARGING

FUEL

CELL

SOLAR

POWER

SERVICE

SILS SURVIVAL/COMPETITION MODEL

Figure 9

environmental management as strategy-the case of sil

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