BMW and UN Global Compact Principles - Case Study Example

?Mr. Ralph Courtenay Director, Corporate Communications BMW Automobiles April 17, Mr. K. Willman Executive of the Local Network U1987 PO Box Bentley 6004 Dear Executive of the Local Network International Standardization Organization (ISO) declares BMW as one of the most superior luxury automobile corporations of the world. The long experience and exposure of manufacturing such a high quality product has earned a respectable status for us in comparison with the several competitor automobile manufacturing corporations, on the foundations of which our company is in a position to make suggestions and recommendations to the Local Network regarding the strict observing of the UN Global Compact principles while exercising corporate strategies and observing business activities. Johnson & Scholes suggest that strategy formulation might apparently be obtained through the analysis of the organization’s environment and the extent to which the company’s resources or strategic capability are matched with the environment. (1993: 156). Our company looks for the unconditional observing of moral values and corporate ethics on the basis of Global Compact principles in order to provide the consumers the superior commodities on the one hand and best and healthy competitive corporate environment on the other. Columbia University Press views that corporate ethics have developed as people have reflected on the intentions and consequences of their acts. From this reflection on the nature of human behavior, theories of conscience have developed, giving direction to much ethical thinking. (cup.edu.com) BMW Automobile has devised the slogan of “sheer driving pleasure” because of its unique outlook, comfortable inside accessories and unparalleled garnishing, which have won the status of one of the most demanded automobiles by the elite stratum of all countries. Bidgoli argues that international markets offer vast opportunities for firms with a product or service in high demand. Newness, cultural adaptation, attractiveness, and appropriate marketing strategies can help tremendously.” (2009, 9) The same is applied with BMW, which adopt all schemes in the light of all the ten UN corporate principles. The present paper focuses on the Principles No. 7 & 8, recommended by the UN Global Compact, which state: (7). Businesses should support a precautionary approach to environmental challenges; (8). Undertake initiatives to promote greater environmental responsibility. (unglobalcompact.org) BMW fulfills both of them in their real sense. BMW adopts the Evolutionary corporate perspective articulated by Whittington. The process vehemently looks for the gradual human growth on the basis of Darwinian biological evolution theory “Survival of the Fittest”, where the notion warns the companies regarding the existence of perfect competition prevailing in the market; only those can survive who are the fittest according to the changing scenario and latest developments being made within the environment. In other words, the industries those are environmental-friendly as well as able enough to mould their strategies according to the alterations being made in commercial environment, make sure headway on the way to progress. Recommendations: i) Establishment of Corporate Environment with Evolutionary Perspective: Benefits & Implications: a. Automobile community can assure its survival provided it sticks to the Darwinian doctrine of adaptability according to the changes within the environment. The companies should be encouraged to devise and revise their strategies keeping in view the global market scenario. b. Our company’s plans and schemes show light of hope to the network members, where they learn the implementation of dichotomous business policies by cut-short of expenditures and price of product subsequently to make it affordable for consumers. Since significant rise in oil prices decrease the purchase ratio, managing design and style on the principles of taking austerity measures may help the companies survive their sales and environment as well. The rival Honda views price-cut as inadequate one, as it may put the reputation of the company at stake. ii) Undertaking of initiatives to promote greater environmental responsibilities for the uplift of network Members and Social Establishment: Benefits & Implications: a. Corporate community should be provided with comprehensive information regarding the alterations in environment, so that they can hire the services of more expert staff members to meet the challenges appear in the aftermath of technological revolutionary measures to enhance their sales and profit volumes. b. Inviting different companies related to same business venture at one platform will bring Network members in a position to share their strengths and weaknesses to combat with the threats faced by the entire industry because of changes in socioeconomic, technological and environmental backgrounds. BMW welcomes it, while Honda appears to be concealing its strategy to show high sales rate. iii Adopting of Outsourcing Strategy by imitating Transnational Corporations: Transnational companies gather big minds under one roof for the achievement of established targets and goals. Benefits & Implications: a. Community members will be in a position to obtain jobs and employment opportunities adjacent to their areas and residences b. Network members will be in a position of hiring personnel in different departments against low remuneration, which they make them capable of introducing multiple schemes with the inclusion of local community belonging to divergent groups; both BMW and Honda observe the same. All the above-mentioned recommendations are outcome of experiences made by our company during ups and downs of business circumstances. Entering into joint ventures and working in collaboration with big brands help out the firms to make rapid changes in strategic planning. 2. Lessons Learnt The studies reveal that hiring the services of right personnel as community members, and working diligently because of established goals earn success for companies and industries. The competitor Honda Company observes collective and group work rather than individual efforts in the decision-making process, which though fastened communication between the executives and decision-makers, yet slows down the decision taking, which require urgent implementation. Consequently, ‘right-first-time’ policy upraised quality and controlled the manufacturing cost. 3. Benefits of UN Principles UN principles manifestly determine the line of action in the light of which companies have to draw out their planning without creating any obstacles on the way of social and physical environment. It is fact beyond suspicion that industries always grow within a healthy corporate atmosphere, and unhealthy and intolerant environment paves the way towards the deterioration of the entire industry. Thus, growth of community proves highly supportive in the maintenance and growth of all corporations within an industrial establishment. 4. Risks Since industries contain natural tendency of envy and rivalry, they seldom like to work for the growth of the competitors by including them hin their community. Hence, non-compliance of the rival firms to co-operate with one another serves as a great risk in the establishment of cordial community environment. The appointment of a Community Liaisons committee with specialized expertise will help mitigate these risks. 5. Conclusion BMW serves as a market leader of automobile industry, which is a trend-setter in respect of introducing new models and styles of cars and motorbikes every year. Such corporate profile is somewhat divergent for the rival corporations, which they refuse to adopt, yet these are the strategies adopting of which gives surety to overcome strategic problems particularly during the period of crisis. In this perspective, no long term plans could be devised and the strategies are completely at the hands of changing market scenario. It is therefore, we vehemently suggest adopting of environment-friendly principles for the best interest of the entire corporate industry. Mr. Ralph Courtenay Director, Corporate Communications BMW Automobiles REFERENCES Alvesson, M. and Willmott, H. Making Sense of Management (Sage, London 1996) Johnson, Gerry & Scholes, Kevan.. Exploring Corporate Strategy. Text and Cases. Third Edition (Prentice Hall New York 1993) Whittington, R. What is Strategy and does it matter?, (Routledge, London 1993) Wit, Bob De & Meyer, Ron Strategy Process, Content, Context Third Edition 2003 United Nations Global Compact Retrieved from http://www.unglobalcompact.org/aboutthegc/thetenprinciples/index.html http://www.menehunewater.com/ C. Dallett Hemphill, Bowing to Necessities: A History of Manners in America, 1620- 1860 (New York: Oxford University Press, 1999), 114. Read More