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Sustaining by working on the bottom of the

pyramid: A case of Jaipur Rugs India on its
socially responsible practices

Article in International Journal of Business Performance Management · January 2012

DOI: 10.1504/IJBPM.2012.044864

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46 Int. J. Business Performance Management, Vol. 13, No. 1, 2012

Sustaining by working on the bottom of the pyramid:

a case of Jaipur Rugs India on its socially
responsible practices

Ruchi K. Tyagi
School of Management,
Radha Govind Group of Institutions,
Meerut, U.P., 250004, India
E-mail: csractivist@yahoo.co.uk

Abstract: Jaipur Rugs is a handmade carpet manufacturer of India with a reach

to about 40,000 artisans. The firm is delivering the value to the customers while
concurrently improving the standard of living of the artisan by uplifting rural
employment. It has received many awards for following the best corporate
social responsibility practices. The firm benefits the workers by connecting
them with global markets. The Jaipur Rugs case also explores how a high level
of decentralisation at investment and production helps it in converting all of its
costs into variable costs and dramatically decreasing its fixed costs.
The present case is divided in three parts to analyse the influence of the
corporate social responsibility (CSR) practices. The first part outlines the
organisational structure; the second part explicates its working while the third
concludes the case through strategic discussion on firm’s practices.

Keywords: corporate social responsibility; CSR; global supply chain; value to

the customers; standard of living; carpet weavers; triple bottom line; CSR
orientation of employees; CSR-O; stakeholders; corporate reputation; business
and society; India.

Reference to this paper should be made as follows: Tyagi, R.K. (2012)

‘Sustaining by working on the bottom of the pyramid: a case of Jaipur Rugs
India on its socially responsible practices’, Int. J. Business Performance
Management, Vol. 13, No. 1, pp.46–59.

Biographical notes: Ruchi K. Tyagi received her PhD in Management and

Master in Business Administration from U.P. Technical University, India, and
Master in Journalism and Mass Communication from C.C.S. University, India.
She is the Head of School of Management, RGGI, Meerut. Her research
domain includes corporate social responsibility and business ethics. Her
teaching interests include corporate social responsibility, business ethics,
human resource management and business communication. In addition to her
writing of numerous scholarly articles, research papers, case studies and
chapters in India and abroad she is also included in the ‘Asia Pacific: who’s
who’ Xth volume (the biographies of man and woman of honour). She has
conducted management development programme as a core speaker and has
participated in the organisational and preparatory work as a speaker in panel,
symposia and conferences at both national and international levels. She
is the Founder Chief Editor to the management journal Prabandhan (ISSN
0975-9689), India.

Copyright © 2012 Inderscience Enterprises Ltd.

 Sustaining by working on the bottom of the pyramid 47

1 Introduction

In order to present an explicit picture of the Jaipur Rugs organisational framework the
case writer has arranged this section into company’s background, product they are
manufacturing and the organisational system a figure on Jaipur Rugs organisational
system is also incorporated for the ease of understanding.

1.1 The background

Nand Kishore Chaudhary (presently CEO, Jaipur Rugs Company, JRC) grew up in a
small town in Rajasthan (a state in northwestern India). He did his graduation from the
University of Rajasthan, N.K. Chaudhary began his career in his family’s shoe shop. To
do something on his own he bought two looms, installed them and learned the technical
aspects of weaving from local weavers, expanded by adding six more looms in his house
and looms in six nearby villages. His entrepreneurial drive ultimately led him to Jaipur
(the capital of Rajasthan) to pursue a career in the rug export business with his brother in
1986. Both brothers split up their business interests in 1999. The Jaipur Rugs got
registered in 2006. Today, the company has many honours and awards on its name
including the most recent ‘Business world-FICCISEDF Corporate Social Responsibility
Award-2009’, for following the best corporate social responsibility (CSR) practices; the
Sankalp 2010 Award as an established enterprise for providing sustainable rural
livelihoods through weaving the handmade carpets, and Indian Achievers Award for
Business Excellence for best practices related to corporate social responsibilities. )The
theory is based on the video clips provided by the company to the author, these include
clips of NDTV profit for ‘Business World-SEDF-CSR’ awards, Sankalp 2010 ‘Social
Enterprise award’ on Bloomberg UTV). According to Tyagi (2010d), the CSR concerns
got global attention in large scale industries but the SMEs which are no less prone to
create critical problems for the human, social and natural environments inimical to the
society as a whole and survival at large, have not attracted the required attention (Tyagi,
2009). The ethical practices in management can be viewed as a comprehensive set
of policies, practices and programmes that are integrated into media operations,
decision-making processes. The Jaipur Rugs business model provides a unique and
dynamic example of how to deliver the value to the customers while concurrently
improving the standard of living of the artisans (Tyagi, 2010b). According to Tyagi
(2010a), the corporate ethics and sustainable development are linked, they are not
identical…for bringing about an atmosphere of support and cooperation between the
business and society, organisations need to create awareness on the principles of ethics in
management, at Jaipur Rugs this aspect is well taken care off.

1.2 Products
Jaipur Rugs manufactures handmade area rugs including the hand-knotted, hand-tufted
and flat woven styles.

1.3 The organisational system

Jaipur Rugs operates in a highly decentralised manufacturing and logistics system. Its
organisational system can be best understood through its multifaceted human resource
48 R.K. Tyagi

(direct and indirect) and its operational entities (four) which share and support the
organisational work and field management of Jaipur Rugs.
• Human resources at Jaipur Rugs: It has approximately 300 direct, full-time
employees comprising seven family members, 226 headquarters employees,
70 regional branch office staff and 40 area commanders. The company has
approximately 40,000 contractors (indirect employees) comprising: 28,000 weavers
and 12,000 other labourers involved in the manufacturing process.
• Operational entities of Jaipur Rugs: The operations are managed through four
different entities. These are – JRC, Jaipur Rugs Incorporated (JRI), Bhoomika Wools
(BW) and Jaipur Rugs Foundation (JRF) a non-profit organisation established in
2004. The JRC headquarters is in Jaipur and a showroom for final products is in
International Home Deco Park (IHDP) in Delhi. The company has 22 branch offices
throughout northern and western India. While the JRI headquarter is in Atlanta,
Georgia; it employs 17 people, mostly in sales positions (July 2008). The JRF
support the organisation from the grassroot level it has five employees based in
Jaipur Rugs headquarters and 12 field employees working with the communities
where the company has operations (Figure 1).

Figure 1 Jaipur Rugs eco system (see online version for colours)

CEO: N.K. Chaudhary.

Director: Yogesh.
Procurement of raw material;
Sale of finished products
(except USA); 22 branch offices
Figure 1: Jaipur Rugs Eco System
CEO:Asha Held by: N.K.
Chaudhary. Chaudhary
COO:Archana To encourage
J
Chaudhary. R weavers enlistment
C
Distribution For the welfare of
marketing and sales JRI JAIPUR RUGS JRF company’s weavers
for USA and their families.
17 employees B
W

Held by: Navratan Saraf.

Facilitates wool acquisition (solely

for Jaipur Rugs).
 Sustaining by working on the bottom of the pyramid 49

Three type of employees the branch managers, area commanders, and JRF motivators
work either in headquarters, branch offices or in fields that also made quality control
checks at different stages of production process. The details of the placement, package
and responsibilities of these employees are:
• Branch managers: Each of the 22 branch offices has one branch manager, most of
whom were encouraged from weaving and have been with the company for a period
around ten to 15 years.
Salary: The minimum of Rs. 8,000 to Rs 50,000 per month (based on experience).
They are responsible for quality checks also.
• Area commanders: Presently, there are almost 40 area commanders, each responsible
for an average of 500 looms. They report to the branch managers.
Salary: The minimum of Rs. 5,000 to Rs 10,000 per month (based on experience).
They are responsible for maintaining communication with the weavers in a given
area and for quality checks.
• JRF motivators: One JRF motivator on an average covers each branch region.
Salary: The minimum of Rs. 4,000 to Rs 10,000 per month (based on experience).
They are responsible for recruiting weavers; supervising and managing weaver
training; educating weavers on various government schemes that provide health
insurance, education, loans, maintaining good relationships with the weavers and
their families.

2 The impact of organisational socially responsible practices on its overall

image and employees

2.1 CSR: business and society expectations

In recent years, corporations are facing increased CSR expectations from their societal
environment; the consumers, investors, community members and potential employees
seek and demand information on corporation’s social performance on the global scale in
a transparent way (Gillis and Spring, 2001; Michael, 2003; Mbare, 2004; CSR Wire,
2005; Balmer and Greysner, 2006; Whitehouse, 2006). The developments during the last
two decades have changed the contours of what is acceptable to the society in context of
International trade (Mccrudden, 2007). The social responsibility has grown to be a
commonly debated issue (Zadek, 2001); products environmental impact and the
producers/providers relationship with the workforce and with local communities are open
to scrutiny (Mark-Herbert and Schantz, 2007). CSR and the notion of a stakeholder
approach are pivotal concepts when examining the role of business in society (Kakabadse
et al., 2005); social effects are not static – they evolve with changes in social values and
scientific knowledge (Mark-Herbert and Schantz, 2007). CSR is a process rather than ‘a
set of outcomes’ (Jones, 1980; Carroll, 1999). CSR cannot be a static concept because
the environment, society, members live in, is dynamic (L’Etang, 1995). Thus, the
relationship between the business and society should include the notions to examine the
50 R.K. Tyagi

awareness and the actual role of the corporates in regard to society and stakeholders. CSR
communication is a way to create a bond between the company and its stakeholders
through corporate home page, the annual report, or sustainability report (Maignan and
Ferrell, 2004; Mark-Herbert and Schantz, 2007). The business for profit only looses the
confidence and trust of consumers, work force, state and the management (Saxena and
Gupta, 2005). As per Trevino and Nelson (1999), there is inherent tendency for managers
to mask business moral issues in the language, accounting for unattractiveness of true
CSR as a business philosophy (Bird and Waters, 1989). Thus, merely talking about being
a socially responsible entity does not help – words need to match actions for the outcome
to translate into success in the marketplace. CSR is the balancing of the economic, social,
and environmental roles that companies play while conducting business (Panwar et al,
2006). The balance between these three values is not regulated by laws; it is a voluntary
initiative (Löhman and Steinholz, 2003; Hollender and Fenichell, 2004; Mbare, 2004).
The business model of Jaipur Rugs fulfils all the above mentioned points and it should be
replicated by other firms for balancing their triple bottom line.

2.2 Impact on employees

There is a lack of theoretical consolidation and synthesis on how and why CSR impacts
on employee’s attitudes and behaviour. When pursuing CSR activities the company
should manage the situation in such a way that the business objectives are achieved
ethically and effectively keeping the stakeholders and their relationship with the company
in consideration (Burke et al., 1986; Greening and Turban, 2000; Moir, 2001; Maignan
and Ferrell, 2001). For this, it is essential to recognise the stakeholders and depending on
the stakeholders’ interests CSR can be defined either in a business- or society-centred
way (Kakabadse et al., 2005). Corporates CSR actions influence employee’s attitudes and
behaviour only to the extent this stakeholder group perceives and evaluates them
(Barnett, 2007; Bhattacharya and Sen, 2004). CSR relates to employees as one of a
corporation’s main stakeholder groups (Donaldson and Preston, 1995; Freeman, 1984).
Numerous psychological factors influence employee’s socially responsible attitudes and
behaviours (Schneider et al., 2004). Employees as a stakeholder group perceive, evaluate,
judge and react to CSR programmes and actions (Rowley and Berman, 2000; Rupp et al.,
2006; Wood and Jones, 1995). Employee’s perceptions of CSR are the central variable
mediating the influence of CSR actions on employees (Rupp et al., 2006; Schuler and
Cording, 2006). According to Barnett (2007, pp.798–801), the stakeholder relations
explain why employees as a stakeholder group impact CSR policy, as employees can be
agent for social change when they push corporations to adopt socially responsible
behaviour (Aguilera et al., 2007). Also, the environmental policy demonstrates that
employee’s support is necessary to secure effective CSR programmes and policies
(Ramus and Steger, 2000). Employees can feel proud to, belong to and work for, a
company that is acknowledged for its positive contribution to society (Brown and Dacin,
1997; Turban and Greening, 1997). CSR is a form of corporate investment characterised
by a dual orientation towards the improvement of social welfare and of stakeholder
relations. Employee’s reactions to CSR initiatives may be governed by reciprocity,
broadly defined as a pattern of mutually contingent exchange of gratifications (Gouldner,
1960). Dutton and Dukerich (1994) found that image perceptions influence employees
who use organisational images to evaluate outsider’s perceptions of both the organisation
and themselves. Therefore, corporate image as conveyed by CSR can directly contribute
 Sustaining by working on the bottom of the pyramid 51

to employee’s sense of self (Riordan et al., 1997). CSR can directly reinforce employee’s
self-definition and subsequently their identification, it can also create positive dynamics
of social exchanges, CSR can enhance positive workplace attitudes, such as job
satisfaction, trigger behaviour (Gond et al., 2010). CSR can be seen as a useful marketing
tool for attracting the most qualified employees and is an important component of
corporate reputation (Fombrun and Shanley, 1990). According to consumer research,
CSR is likely to influence employee’s attitudes and behaviours only if they are aware
of the actions (Bhattacharya and Sen, 2004; Schuler and Cording, 2006; Sen and
Bhattacharya, 2001). Three antecedents are likely to shape how strongly CSR actions
influence employee’s CSR perceptions: awareness about CSR, individual beliefs in CSR
or CSR orientation of employees (CSR-O), and finally the fit between organisation and
employee’s values (Gond et al., 2010).

3 Research approach

In order to carry the task in hand, i.e., preparing a case study aimed to give an in-depth
understanding of a specific situation. A case study gives a holistic view of an issue by
examining real-life events by posing ‘how’ and ‘why’ questions about contemporary set
of events over which the investigator has little or no control. A case study may be used
for a wide range of purposes in business, politics, and social work [Merriam, (1998),
p.35]. Since the approach of study is to focus on understanding, interpretation and
discovery rather than trying a hypothesis the researcher has taken abductive approach
qualitative method to achieve the objectives of her study through unstructured and
open-ended interviews conducted during the August 2009. The organisation under
study is first contacted through e-mail followed by telephonic interviews, site
viewing and personal interview with Mr. Nand Kishore Chaudhary, CEO, JRC;
Dr. Sanwar Singh Yadav, Human Resource Manager, JRC, who with patience not only
provided organisational information but made the author interact with company
employees, summer interns and also the artisans also. The notes were taken during the
interviews the company has provided video clips of various television channels covering
the organisation in its regional programmes and news along with company’s own
presentation. The organisational survey and preparation of the case took almost a year to
come into its present shape.

4 The findings

Jaipur Rugs is developing human capability and skills of thousands of independent

workers organise in a unique, complex, decentralised system with raw material sourced
from around the world, processed by traditional weavers (and also those whom company
trains) into rugs while maintaining quality control. Through this the company connects
the grassroot level weavers with global markets (for instance, USA) while providing
them steady incomes (Prahlad, 2009b). Jaipur Rugs management recognises the
importance of international quality standards, issues related to deployment of child labour
especially in such a model where the firm does not have a direct control (Bansal, 2009).
The company has received ISO 9001:2000 certification, and ISO 14000. In this section of
the case, the author will present how the company manages its logistics, production
52 R.K. Tyagi

process and what is the role of information technology (IT) in it. The case writer on the
basis of the interviews conducted and her personal visits to company’s site for the ease of
understanding is now forwarding the various findings in three sections – the production
process at Jaipur Rugs; how the company manages its logistics; the IT architecture of
Jaipur Rugs.

4.1 Production process

The production process begins after an order is generated by the production department.
The rugs are produced by 40,000 artisans in between the procurement of the raw material
globally and worldwide distribution of the finished products. These artisans belong to
rural areas of seven states in north and west India about 12,000 of these are additional
production workers that adds to the comprehensive system of quality control and
logistics. The partner company BW carries out raw material sourcing (wool and silk),
wool processing and raw wool cleaning, sorting and blending at its seven warehouses
mostly by female workers who are paid on output basis. This is followed by Carding
(manual or by machine), Jaipur Rugs outsource the vast majority of their wool to an
external machine carding company. Carding is followed by spinning. The hand-spun
wool is produced by women in villages near Bikaner. According to Prahlad (2010), in
fiscal year 2007–2008, 57% of the wool spun by Jaipur Rugs was hand spun and 43%
was machine spun. It takes approximately on hour to spin one kilogram (Kg) of wool, for
which a spinner is paid Rs 19. Recently, the spinner price per kg has been increased to
Rs. 25 (Tyagi, 2010b) Spinners are paid once or twice a month in cash by the branch
manager. The spinner is required to deliver the spun wool to BW in hanks (hank is a unit
of yarn that is in a coiled form) and pick up a new batch of raw wool. Once a week, the
hanks of wool are transported from the branch offices to the Bikaner warehouses by
truck. Dyeing is done next which takes an average of two to three days, including
transportation to and from the Jaipur Rugs office (un-dyed yarn is send to Bhadoi in
Mirzapur which is a central to Indian state of Uttar Pradesh, 774 Km away from Jaipur).
Opening is the next process in it spindles are made out of the dyed yarn hanks (five
opening centres in nearby villages of Jaipur like Amber, Sarai Bawri, etc.) Each worker
(mostly old age dependents, women and physically disabled) can open approximately
15–20 Kgs of yarn per day and earn an average monthly income of Rs 2000. The spindles
are then stored in company’s warehouse until it is transported (bundled in a bag with the
design map) to one of the looms across seven states in north and west India. The
company uses different models to engage with weavers (direct relationships with
weavers, indirect relationships with weavers through middlemen, etc.). After coming off
the looms the rugs are transported to the finishing centres (independent unit working
exclusively for Jaipur Rugs) where emphasis is made on the design, fixing mistakes
before final cleaning. Final inspection takes place before the rug is prepared for the
export (the production process theory is based on the video clips provided by the
company to the author, these includes interview Shri N.K. Chaudhary on ‘Chaupal’, a TV
show of Rajasthan TV).

4.2 Logistics management

Starting from the actual production process till headquarter receives the finished rugs
comprising the shipment arrangements for assured delivery to customers five departments
 Sustaining by working on the bottom of the pyramid 53

work in coordination – the central control room, design department, production

department, store department and the carpet receiving department employees in the
central control room determine if a production order is for a design with an available
reusable map (no modification related to size and colour is necessary) while in case of
changes the design department comes out with new maps. Map once used is stored in a
map storage room for future use by the design department. The design department
designs and creates the design sheets, known as ‘maps’. For the print of the map, a raw
material card is matched with a design. The map is then printed, cut and laminated. The
Staff in the stores department communicates with design department staff to find out map
for each new rug. The stores than stuff a bag with a raw material card, a map, and
bundles of dyed yarn to the branch office which in turn give it to the weaver. The map
carries handwritten instructions to tell the weavers where to start weaving, also to
facilitate the weaver and avoid colour selection mistakes yarn samples are stapled to the
map. In order to match a rug order the production department first determines the
approximate geographic area in which the rug will be made (based on the required type
and the quality). Once the area is determined, the production department calls the area
commanders from the nearest branch office to assign a weaver based on their loom
availability, skill level, and weaving speed. The woven rug, leftover materials (if any),
and the map would be received by the carpet receiving department which in turn sends
the woven rug after inspection to finishing centre and leftover materials to the storage
department.

4.3 Technical architecture (IT)

The company’s technical architecture combine the IT infrastructure, human interaction,
fidelity, and training (Saraf, 2009). According to Prahlad (2010), the enterprise resource
planning (ERP) system optimises company’s geographically diverse supply chain by
supporting continuity of work, institutionalised quality control, and achieving scale. For
creating well designed communications networks, to deliver raw materials, communicate
with weavers, and track the progress of work in remote villages with no electricity and to
effectively manage a highly human capital-intensive process the area commanders are
provided with booklet for recording the physical condition of the loom and quality of
weaver. The area commanders’ booklet information is fed on weekly basis and is
provided to the end customer through ERP system.

5 Discussion and conclusions

For the ease of understanding a specified discussion is presented in this section on – How
the Jaipur Rugs business model is unique and different from cooperative? How the
company manages its supply chain? What are the exclusive practices which help the
company to operate smoothly in a highly decentralise business? The answer to these are
discussed under the heads business model, supply chain, exclusive practices followed by
the company and welfare work supported by the N.G.O. in the under mentioned text.
54 R.K. Tyagi

5.1 Business model

The development must rely on knowledge acquired by experience and local know-how.
According to Tyagi (2010c), the rural people themselves have acquired skills in three
major areas which, applied together, can lead to sustainable development. They have
mastered the arts of: making productive use of their natural environment, managing their
economic development, and structuring their social organisation and the company is
utilising the same as a base to its business model (the author has documented
the business model on the basis of Personal Visit to Jaipur Rugs and interview with
Shri N.K. Chaudhary, interaction with the staff, site viewing and personal interview of
Dr. S.S. Yadav, HR Manager Jaipur Rugs Pvt. Ltd. made on 8 August 2010).
• Eliminating middleman from the chain: Jaipur Rugs is changing the traditional
model of middleman-owned looms to facilitate weavers to own their own looms.
They support weavers to obtain subsidiaries from the government that help them in
getting finances up to 50% to 75% of the cost of the looms (Jaipur Rugs overview
presentation made by the company H.R. at company head office in Jaipur on
9 August 2010). The eradication and or minimisation of middlemen freed the artisans
from under payment, mistreatment, etc., thus it is welcomed by the local weavers as
well the company is benefited by personal contact with concerned weaver for quality
control.
• Loan facility: Jaipur Rugs model is different from the cooperative but if replicated in
other industries it can bring or add to self employment. Jaipur Rugs provide loans to
the contractors with work know-how and fair track records with the company giving
them opportunity for being connected in the overall production process this in turn
not only add to the incomes and capabilities but also social standing of the
contractors. For example, according to Rao (2009), Rohitari is an entrepreneur in
Sonbhadra district, who is said to be a weaver. He used his own resources to
purchase three looms. He employs 12 people. He produces rugs exclusively for
Jaipur Rugs and uses the revenues to pay back his loom loans and reinvest in his
business, which he plans to continue to expand.

5.2 Supply chain

The Jaipur Rugs besides US market also focuses on other potential markets like:
South Africa, Turkey, United Arab Emirates, UK, Japan, Italy and Germany. For
maintaining such diverse markets it is necessary to have efficient supply chain and a
decentralised organisational system at production and investment end the supply chain
decisions in carpet weaving has its impact on the success of a firm. The details are as
follows:
• Prahlad (2009a) suggested that Jaipur Rugs organisational structure is such allied
that a high level of decentralisation at investment and production activities exists.
Bhoomika is able to convert almost all of its costs into variable costs and
dramatically decrease its fixed costs.
Efficient supply chain is another asset to the company. Jaipur Rugs weavers are not
responsible for picking up the raw materials and delivering back the woven rugs to
the branch office saving the weavers significant time and money in transportation.
 Sustaining by working on the bottom of the pyramid 55

5.3 Exclusive practices followed by the company

• Employee – management relations: N.K. Chaudhary the CEO of JRC interact with
his employees through weekly night conversations, book sharing and visits to near
by places. The details of these strategies to initiate and facilitate leadership in his
employees are as follows:
The entrepreneurial qualities are discussed by Mr. Chaudhary (CEO, JRC) every
Sunday night this informal conversations with employees usually precedes for an
hour these discussions reveals employee individual talents as well.
Books on leadership, inspiration and business management and administration
themes are collected and shared by the employees at JRC they also discuss how to
apply theory into practice for the mutual benefit of the company and employees.
An extra inning of informal conversation is made through visit to near by sites this
not only makes employees feel themselves closely associated but also work as
whistle blower.
Company pays people competitively giving them options for a better quality of life
than the optional work accessible in villages. For example, Rekha Rathore (master
trainer) became master trainer for carpet weaving at the age of 18 years and trained
at least 16 other young female weavers.
• ERP: Jaipur Rugs area commanders carry a standardised booklet to record the status
of each rug every time they visit a loom. The information is updated and through
ERP the end customer is able to know the current status of his order.
• ‘Maps’ for matchless and new designs: At Jaipur Rugs, the design and creation of
the build sheets, known as ‘maps’ is done by the design department for quickly
respond to changing customer preferences and business needs. The maps furnish the
weavers (who by and large have minimal education) easily understandable directions
on where to put each strand of different coloured yarn. Because of the way the maps
are designed, a weaver essentially needs no training to produce a new design on a
given loom. To amplify their durability these maps are laminated.
• The JRF supports the welfare work: JRF (N.G.O.) recruits and trains new weavers
for the company (Wadhwa, 2009). This not only motivates them to work for the
company but also has impact on the workers social life. The JRF also leverages
synchronisation with other NGO’s that provide healthcare and education to the
weavers.

6 Conclusions

Jaipur Rugs business model leads the firm to operate in a highly decentralised
manufacturing and logistics system. The model should be replicated by another firms to
make CSR as integral part to business practices rather than lip service.
The coordination of activities across multiple legal entities bestow Jaipur Rugs with –
access, but not ownership, to specific skills; influence, but not control, over key processes
and decentralisation of investment. The Jaipur Rugs business model explores how a high
56 R.K. Tyagi

level of decentralisation at investment and production helps in converting all of its costs
into variable costs and dramatically decreasing its fixed costs.
Besides the five N.K. Chaudhary children that head up different areas of the
company, many of the area commanders and entrepreneurs who own the businesses are
key parts of the production processes and got their start as weavers for the company
suggesting that socially responsible business practices not only enhances a corporation’s
reputation for prospective employees by increasing organisational attractiveness and firm
familiarity, but also influences incumbent employees.

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