1. How does Vodafone’s approach to Corporate Social Responsibility support the Strategic Direction of the organization given the recent dynamic and turbulent environment?
Modern day corporations are behaving in more responsible way than before and corporate responsibility has become a hot issue than before. There are some businesses which are even bigger than many nation states. According to 1991 figures three million people have been employed by the world’s top ten organisations and their total sales figures are more than eight billion dollars (Cannon, 1994). Vodafone is the largest British mobile company by revenues and second largest company by subscribers after china mobile company. Vodafone has 45% shares in Verizon (largest in America, £25 billion worth), American mobile company. (pg. 68).
The aim of the businesses should not be to impose war on nations as did in the form of Hawkins and Drake. Now businesses behave much more reasonable and responsible way towards society. Vodafone is well aware of the fact that, the only way to get the shareholders value in long term is to incorporate corporate social responsibility into company’s strategy thus the public trust can be achieved. Vodafone does not take CSR as a philanthropic approach but as a strategic tool. It follows CR strategy on every local unit and is connected with its employees all the time and it is in support of team work between employees.
Vodafone constantly review its CR policy in implementation of the strategic initiatives. Vodafone initiative to provide access to mobile phone connections to people from developing countries is one smart decision the company took in this turbulent time. And the company approach in rural-India connecting most parts of the deserted land with remote farmers is a work of commendable success and I wonder whether these people know any other mobile company than Vodafone. And the company is working with manufacturers like TCT/Alcatel, Foxlink, Sagem and ZTE for affordable mobile phones. In India Vodafone introduced cheap handsets (Vodafone 125, 225 and 226) those were very popular among middle and low income Indian people.
Further, Vodafone contribution in war tone Afghanistan and poverty stricken Nigeria are of strategic interest and they are among few to enter for the first time to those locations (Vodafone Group CR report 2009). Nigeria was supported for its banking activities and speeding the processing time and it helped many to attract to mobile phones service. The company got a clear advantage in Nigeria strategy under the state patronage. Vodafone worked in number of ways to reduce carbon footprints in the environment. The most famous is the phone recycle project, where they issue a new phone plus the free connection for the old one. This was a very much popular in Asia and company placed in an aggressive brand promotion phase with this phone recycle project. Further their approach in networking in leading companies has been able to reduce travelling and provided better options of meetings connecting one end to the other. This is named as ‘Green Travelling’ (Vodafone Group CR report 2009).
Vodafone approach to customer care is remarkable and improved over the time. Especially in giving protection to customer data, identity and privacy and priority giving to customer views thoroughly differentiate Vodafone from the rest. And it is not surprise to see customers moving in their way. Further Vodafone has been able to keep the phase by excellent service and maintaining efficiency in operations by keeping in constant touch with other service providers for accessories. The company always took the burden of checking the accessories for its quality standards, human health aspects by minimizing magnetic field effects to users and maintaining quality after sales service.
So from the above account it is very much revealed Vodafone CSR has a direct link to the company strategy and it not mere philanthropy.
2. In what ways do you consider the organizations Corporate Governance system might be changed if the monitoring of social responsibility became embedded in the culture?
World has Passed through feudalism and industrialisation and today world is in the era of globalisation. Present developed world of information has successfully shifted from agricultural and industrial age which has given corporate governance a new edge and has made organisations more responsible and more accountable (Davies, 1991). There has been number of financial scandals which prompted that organisation’s activities should be monitored and directed. Corporate Governance means directing and controlling the operations of the corporation (Cadbury Report, 1992).
There is no hesitation for Vodafone has a sound CR reporting system following a bottom up approach. It is very visible from the CR report the company has taken many social concerns in regard financial and environmental. And it is shown in their implementation of the in the field. Especially reducing the carbon foot prints their introduction of new technologies at company level which was decision of the board that has worked well. It is important have a resourceful secretary’s office to support these activities at board level. This step will facilitate further in getting feedback from the society on time to time and adjust the CR policy with changing needs. Non executive directors’ (NEDs) access to the secretary is vital in getting information of the external and internal environment as this will help further in providing timely arguments when the issues are tabled in the board meetings.
If the Corporate responsibility is embedded in the governance strategy, there is a need to make it a priority call for everyone in the board. Hence it is advisable to have a CSR committee that specifically deal with organization’s specific CSR matters and advice the board accordingly. Thereby board can prioritise and extreme line CSR approaches by providing a proper directions. Organization’s economic responsibility of the board is another area need to monitor and advice. As mentioned in the Turnbull report 1998, the internal controls need to be more extreme line and for that the formation of a risk committee is a one area that the Vodafone management can think of. This is very important to the company as CSR initiatives and company business strategies are intertwined which is a speciality of the Vodafone business strategy. And it is essential to have majority of NEDs in the risk committee as they can avoid any bias situation and further counter argue the proposals for the risk matters.
Organization’s decision making is always a board- management joint function and the accountability to the stake holders need to establish rather than focus alone shareholders interest. Hence Vodafone board can evaluate the implications of them decisions onto the stake holders. This practice is economically not viable but proves to be very helpful in evaluating the amount of good being done to gain profits. This practice also helps the organizations to make and maintain its image as a socially responsible corporation in the eyes of its stake holders.
Vodafone has to deal with ethical issues in cross-cultural settings. It is also said, two decades ago that “as more firms move into multinational operations, ethical issues tend to increase” (Murphy and Laczniak 1981,p 58). Actually, international corporations are often criticized for ethical misconduct. In a cross-cultural environment, Businesses are exposed to different values and ethical norms. The moral question of what is right or appropriate poses many dilemmas for international businesses. Even within a host country, ethical standards are frequently not defined or always clear (Cateora and Graham: 142).
Hence the Vodafone approach to ethical issues needs to be brought to the attention of the board whether it’s internal or external in aetiology. Hence the reporting and monitoring of the ethical standards must be a commitment of the board and this can be handled by the same CSR committee itself. As a diverse organization spread around the world the ethical standards like common working hours, same benefits, equal opportunities for promotions and job security need to establish on common grounds and need to get feedback by the board on regular basis to make sure zero deviation from the set protocols.
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* ABI (2007), Business: India Calling Vodafone. Library Resources, [online]. Available from: http://proquest.umi.com/pqdweb?did=1220900411&sid=6&Fmt=3&clientId=16052&RQT=309&VName=PQD. [accessed 20 April 2010].
* ABI (2003), Business: A New Voice at Vodafone; Face Value. Library Resources, [online], 368, (8335), p68. Available from: http://proquest.umi.com/pqdweb?did=978778921&sid=6&Fmt=3&clientId=16052&RQT=309&VName=PQD. [accessed 18 April 2010].
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* Cadbury, A. (1992), Report of the Committee on the Financial Aspects of Corporate Governance, Gee Publishing, London.
* Cannon, T. (1994), “Corporate Responsibility”, A Text Book on Business Ethics, Governance, Environment: Role and Responsibilities. PITMAN PUBLISHING UK.
* Murphy, P.E. And Laczniak, G.R. (1981), “Marketing Ethics: A Review with Implications for Managers, Educators and Researchers”, in Enis, B.M. And Roering, K. J. (Eds.), Review of Marketing, AMA, Chicago, pp.251-266. Available from: http://www.realizingrights.org/index.php?option=com_content&task=view&id=66&Itemid=109 . [accessed 28/06/2010].
* Vodafone CR report 2009. “Mobilising development; Corporate Responsibility Report”, Vodafone group PLC.
* http://www.vodafone.com/start/responsibility_uk/review_sept09.html. [accessed 28 June 2010].
* http://www.vodafone.com.mt/life-at-vodafone?l=1 . [accessed 28 June 2010].
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