Volkswagen AG company - Essay Example

?Volkswagen AG company With time fulfilling social needs within society a business operates in has become one of the priorities of many companies. This attention to corporate social responsibility can be devoted to the trend of consumers’ having become more responsible in terms of environmental protection and other social problems. Companies, in response to consumers’ demand, are trying to do something good for the areas and societies they operate within. Such good things include many aspects, among which are corporate social responsibility (CSR), corporate philanthropy, corporate citizenship, corporate community involvement, corporate giving, community development, and corporate societal marketing among others (Kotler and Lee 2005, 2). It is also believed that good companies should not only use the resources of the society in which they work, but also give back. So, in addition to driving social progress and affluence, as Werther and Chandler (2010, 4) outline, companies are supposed to include social initiatives into their strategies. This should ensure a better economic performance of the company because consumers and stakeholders of the business are more loyal to socially responsible and socially responsive organizations. CRS, therefore, should be in the basis of all the economic, legal and ethical actions of a successful organization (Werther and Chandler 2010, 8). With this in mind it is interesting to analyze how in particular large organizations fulfill their CSR and sustainability plans and promises. This paper, therefore, will present an overview of CSR initiatives of Volkswagen AG company, and will try to determine how effectively the company fulfills its sustainability and responsibility, as Volkswagen’s website suggests (www.volkswagenag.com), promises. The case for the Volkswagen Group The Volkswagen Group has its main headquarters in Wolfsburg (Germany) and operates 62 plants that produce cars in 15 countries of Europe (The Group). The company views itself as a global player with German roots. Consequently, since Volkswagen sells its cars all over the world, the company’s CSR goals are also global. Volkswagen, Audi, SEAT, Skoda, Volkswagen Commercial Vehicles, Bentley, Bugatti, Lamborghini and Scania are the brands that support the overall Group’s vision of creating value. The CSR philosophy of Volkswagen Group is that social responsibility can be achieved by means of increasing corporate value. At the same time, Volkswagen believes that stable and sustainable success of the company can be achieved only with the help of social responsibility (Walther et al. 2007, 201). Since 1997 the company started to modify its relations with employees and managed to save 30,000 jobs in the early 1990s after reorganizing the company’s working-hour model (Institute for Corporate Culture Affairs 2006, 310). The business managed to agree with its employees their working longer hours when the company has many production orders, and shorter hours when the number of orders is lower. The company then continued increasing the workholder value – employees of Volkswagen have an ability to invest parts of their wages into “time asset bonds” that are invested in the capital market (Walther et al. 2007, 202). This allows people to shape their retirement. Volkswagen is also one of 1700 companies (out of 70 000 multinational corporations) that voluntary agreed to comply with the Global Compact principles that encourage business to respect human right, lead non-discriminatory activities, fight corruption, protect environment and so on (Institute for Corporate Culture Affairs 2006, 312). Volkswagen promotes employee rights in terms of minimum standards, non-discrimination, skill enhancement programs (Sinzig 2010, 17). The company offers to its employees training in vocational and international groups. The company has a separate department, AutoUni, which is responsible for knowledge sharing and skills transfer among the 399,381 employees of the organization (The AutoUni 2011). As for the environmental policies, Volkswagen works for CO2 reduction and gas-saving. Resource-optimized manufacturing processes were designed and implemented in order to reduce CO2 emissions per vehicle manufactured (Environmental Indicators 2011). The company invests much into research and development in order to make its manufacturing facilities and vehicles more environment friendly. The following technologies have been worked on with the purpose of reducing gas emissions: powertrain technologies, new gearbox, improved start\stop system, reduction on mechanical resistance, light weight construction, and optimized aerodynamics (Pratorius 2010, 14). In order to reduce manufacturing emissions of CO2 Volkswagen created a Corporate Energy Working Group. In addition, the Group’s research and development team is continuously working on transferring all Volkswagen vehicles to electric power. Innovation is believed to be the key to company’s success, so the Group continuously invests large sums of money into research and development. Currently Volkswagen already manufactures Touareg Hybrid. It is planned to introduce the Jetta Hybrid by 2012 and E-Up! in 2013. One of these models will be the first all-electric vehicle of the United States (Electromobility 2011). The company conducts gas-saving trainings for consumers in Germany. The goal of the trainings is to reduce emissions of used gas and, in such a way, make driving more environmentally friendly. The company is also working on introducing SunFuel – gas made of biomass (Sinzig 2010, 17). In general, it can be said that Volkswagen shows to be a rather responsible and sustainable company that is trying to minimize the negative impact of its manufacturing on the environment, as well as be a good employer. The company cooperated with many global and local organizations in attempts to have a positive influence on global business practices, to fight discrimination at work and improve life of the societies in which it works. Though it costs the company additional money to participate in local and global SCR initiatives, as well as to research and develop new and less harmful for the environment technologies, the Group is committed to creating value through innovation and responsibility. Innovative environmental technologies, as the company believes, will become the basis of Volkswagen’s success – by 2018 the company plans to become a leading vehicle manufacturing company (Strategy 2018 2011). Economic and social initiatives of the Group have made it a company where people want to work, and with which organizations and governments are willing to cooperate because such cooperation is beneficial for the countries and for the planet in general. Nevertheless, no matter how much Volkswagen invests into CSR initiatives and programs, the negative implications of car manufacturing cannot be underestimated. The case against the Volkswagen Group Though Volkswagen managed to reduce energy consumption by their cars, the company’s energy consumption is continuing to increase (Environmental Indicators 2011). The Group explains increased energy consumption by the fact that production increased. So the company had to implements a special resource conservation strategy in order to lower the consumption of energy. CO2 emissions in 2010 made up 7.7 million t/a in comparison to 6.45 in 2009. The company is trying to justify itself stating that “83 percent of the Volkswagen Group’s total CO2 emissions are accounted for indirectly by district heating and power generation” (ibid). Furthermore, such high emissions, according to the company, are caused by poor infrastructure in the countries where Volkswagen plants work. Only 17% of CO2 emissions are caused by combustion processes at Volkswagen plants. The company’s demand for chemical oxygen in wastewater contamination has increased to 4.043 t/a in 2010. In 2009 it was only 2.952. Water consumption and volumes of wastewater have also increased. Comparing 2009 and 2010 indicators, it is obvious that volumes of waste, such as waste for disposal, waste for recycling and metallic waste, have also increased significantly. The company also does not hide the fact that its capital investment in environmental protection has lowered. Most of the money, as company reports, were spent for water conservation, waste management and air pollution control. In general, any car manufacturing is dangerous for the environment. Both cars and car manufacturing do pollute the environment. However, in relation to Volkswagen it can be said that the company, though does pollute the environment, is trying to minimize the negative impact of its operations on the nature. Concluding remarks Any industrial manufacturing is dangerous for the environment, and Volkswagen is not the only company that damages the nature. The impact of manufacturing and driving cars on natural resources is great. Nevertheless, Volkswagen can be said to be a company that is sincerely trying to outweigh harm to the environment by their CSR initiatives and programs. Though Volkswagen’s manufacturing does consume natural resources of the planet and does damage the environment, the company’s actions for improvement are visible and valuable. Volkswagen is a good example of a socially responsible organization – they work on waste and emissions minimization, take care of their employees, fight discrimination and corruption, help to protect the environment and cooperate with governments and organizations to achieve such positive goals. It is, of course, difficult to say whether all these efforts can really compensate for all the damage that vehicles cause to the nature. However, it is definite that Volkswagen’s attempts and plans to manufacture purely electric cars will bring positive results in the long run. The company is investing into innovations that will make driving a less dangerous for the environment process. It is a good and exemplary for other manufacturers goal. References Electromobility. 2011. http://www.volkswagenag.com/vwag/vwcorp/content/en/sustainability_and_responsibility/environment/electromobility.html (accessed August 8, 2011). Environmental Indicators. 2011. http://www.volkswagenag.com/vwag/vwcorp/content/en/sustainability_and_responsibility/facts_and_figures/key_indicators_uebersicht/environmental_indicators.html (accessed August 8, 2011). Institute for Corporate Culture Affairs. 2006. The ICCA handbook on corporate social responsibility. John Wiley and Sons. Kotler, P., and N. Lee. 2005. Corporate social responsibility: doing the most good for your company and your cause. John Wiley and Sons. Pratorius, G. 2010. “CSR at the Volkswagen Group: Building Successful Sustainable Strategies” Volkswagen. http://www.iirpresentations.com/A1089/pdf/D1-1530-GerhardPratorius.pdf (accessed August 9, 2011). Sinzig, C. 2010. Corporate Social Responsibility – A Comparative Analysis of Germany and the USA. GRIN Verlag. Strategy 2018. 2011. http://www.volkswagenag.com/vwag/vwcorp/content/en/sustainability_and_responsibility/strategy/strategy_2018.html (accessed August 10, 2011). The AutoUni. 2011. http://www.volkswagenag.com/vwag/vwcorp/content/en/sustainability_and_responsibility/society/Employment/the_autouni.html (accessed August 9, 2011). The Group. 2011. http://www.volkswagenag.com/vwag/vwcorp/content/en/the_group.html (accessed August 9, 2011). Werther, W., and D. Chandler. 2010. Strategic Corporate Social Responsibility: Stakeholders in a Global Environment. SAGE. Zimmerli, W., W.C. Zimmerli, K. Richter, and M. Holzinger. 2007. Corporate ethics and corporate governance. Springer. 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