Corporate Social responsibility Case Study

Corporatization of water: The UK experience

OR

Abstract:
The global water market was worth $ 287 billion in 2005, and was expected to be $ 413 billion by 2010, yet it was considered a ‘young’ industry serving only 5% of the world’s population. In 2004, Europe had the world’s largest water utility industry, accounting for 42.6% of global value , generating revenues of US$ 257.7 billion. Asia-Pacific was at the second position with total revenues at US$ 136.3 billion and the US yielded US$ 115.8 billion. The European market for the water utilities was expected to grow by 15.5% to US$ 297.6 billion in 2009.

From the late nineteenth century onwards, the water utilities services had been taken over by local authorities and a mixed pattern had developed. In 1974, the service was reorganised. A total of ten unitary regional water authorities (RWAs) were created, each covering a river basin area, each responsible for water quality, water supply and sanitation throughout the area. Thames Water Company was the pioneer in the industry and had faced criticism on many fronts.

By 2005, there were many multinationals in the global water market. The leaders had emerged from Europe. Helped by the liberalisation policies of the World Bank and the IMF, these companies became profitable and powerful. According to water analysts, around 51 million people got their water from private companies in 1990 and by 2005; the figure crossed more than 300 million.

The major players in the water industry had a say in policy decisions, were powerful enough to influence multilateral donor agencies and governments, and their names featured in the lists of the global top-performing companies around the globe with revenues matching those of small countries. Analysts expected these companies to control 65-75% of formerly public waterworks in Europe and North America by the year 2020.

The case raises a debate whether to treat water as an economic good or as a natural resource to be made available to the masses. Would corporatisation of water be able to balance societal needs with sound financial performance of the water companies?

Pedagogical Objectives:

• To debate whether to treat water as an economic good or as a natural resource to be made available to the masses
• To debate whether corporatisation of water will balance societal needs with sound financial performance of the water companies.

Keywords : Corporate Social Responsibility Case Study Social Responsibility, Business Strategy, Strategic Management, Leader growth strategies, Service, Corporatisation, Privatisation, Public-Private partnerships