Corporate Social Responsibility in Ooredoo Qatar Company - Case Study Example

Ooredoo Qatar Company Ooredoo Qatar Company Introduction The world of business is dynamic and sometimes unpredictable. Organizations exist within communities from whom they get their factors of production. It is also from the same communities that they sell their products and services. This fact brings about the concept of corporate social responsibility. In the functioning of those organizations, there have to be guiding principles called ethics. These ethics play an important role in maintaining the discipline of organizations, which ensures that managers can control the activities and performance of the organizations. Background on Ooredoo Qatar Company Ooredoo is a public telecommunication company based in Qatar. It provides mobile, wireless, wireline and content services (Ooredoo.om, 2015). The state partly owns the company. It was a monopoly before starting to trade publicly in 2006. Ooredoo was first launched in Kuwait in 1999 before Qatar Telecom acquired 51% Wataniya Telecom shares from Kuwait Projects Holding KSC (KIPCO) group. In 2012, Qatar Telecom (QTel) made an offer to acquire the rest of the company. It has since increased its share to 92.1%. Its name changed to Ooredoo from Wataniya. QTel itself began in 1949 but was officially established in 1987. It developed to be National Telephony Services in 1970, operated by Qatar National Telephone Services (QVTS) while international services by Cable and Wireless. Corporate Social Responsibility Role of Corporate Social Responsibility towards Shareholders Corporate social responsibility (CSR) is a duty that organizations have, other than making profits, to communities in which they find themselves. It is an emerging concept that has become universally accepted and adopted by many business entities as a way of appreciating communities and other stakeholders of organizations worldwide. CSR consumes the resources of organizations thus reducing their profits. This appears to be an inconsistency to the role of directors, which is to increase the wealth of shareholders by increasing profits. However, CSR does not start or end with the communities themselves but also with the shareholders too. Managers of organizations have a corporate social responsibility to shareholders in varied ways. The first corporate social responsibility and the most important are maximizing profits leading to good returns and dividend policies. Organizations have a responsibility to shareholders who are the owners of capital to offer them good returns. This, therefore, calls upon the managers of Ooredoo to always make favorable and attractive dividend policies, which will attract more investors and create value for the shareholders investments. It is the responsibility of Ooredoo management to shareholders to ensure communication and disclosure of financial information. Managers are professional agents of shareholders hired to run organizations on their behalf. The shareholders are, therefore, entitled to financial information of their company (“The Gulf Time”, 2014. Additionally, managers should always communicate to shareholders on a regular basis and give proper, as well as true information about the status of the company during the annual general meeting. The manner in which such communication and disclosures are done should be understandable to the shareholders and managers should observe brevity and precision since shareholders are not professionals of finance. There is much in a name. As such, managers have a duty to protect the name and reputation of Ooredoo. External institutions evaluate organizations using the reputation of such organizations. Organizations with a good name and reputation, therefore, are a source of pride to shareholders. The management of Ooredoo makes sure that they employ the best employees to grow the wealth of the shareholders. Additionally, the management has to keep and grow the customer base as a way of increasing the wealth of shareholders. The management has to keep happy employees who in return will be more productive and thus give shareholders a return on their investment. The shareholders are always interested in the long-term prospects of the organizations they own. As such, the management of Ooredoo should always think and carry out their activities that will make the organizations long-term goals and objectives achievable. This is a responsibility they have to share as part of the wealth maximization goal and short-term responsibilities of maximizing profits. Business Ethics Discussion of Theories in Relation to Employees, Consumers, and Government Managers and organizations are accepting and adopting the concept of corporate social responsibility. Such responsibility often has close link to social responsiveness, which is the ability of an organization to relate its operations and policies to the social environment in ways that are mutually beneficial to both the entity and society at large. Ooredoo is part of the society. It interacts with other institutions such as banks and competitors, as well as peoples such employees, shareholder, and other stakeholders (Al Bawaba, 2015). Organizations do not exist in a vacuum. Communities house them. A good relationship between the organization and the home community is, therefore, necessary if the long-term goals of the organization are to be achieved. CSR is subjective and depends on the economic and social systems in which organizations operate. For instance, benefits from social responsibility do not directly accrue to the firm making the expenditure on such obligation. Corporate social responsibility is thus a system holding that the corporation should respond to the moral and ethical values of a community within which it is licensed and which it serves (Ra, 2015). A particular firm will draw from and shape the values of the community from which it draws its existence. CSR attempts to fuse social values with profit maximization goals. Over the recent years, there have been many arguments for and against corporate social responsibility, which are both real and perceived. Perceived are those, which are practically impossible to trace to the performance of the organization or the community while the real ones are those which their impact can be felt by the community and affect the actual performance of the company. CSR is ethical, voluntary, and not compulsory. There are views towards it. The communist view suggests that the organization is only concerned about profits and that social responsibility should be imposed by governments. The capitalist view hold that businesses are there to make profits, and social responsibility is irrelevant and the welfare of the community is not their business. The pragmatists hold that the first responsibility of businesses is to make profits and keep operations solvent then voluntarily assume social responsibilities. Trusteeship view holds that organizations should hold what is enough and give the rest. CSR to stakeholders is diverse. Any organization has very many stakeholders and thus it is a huge responsibility to all of them. Stakeholders include all people related or interacting with the organization such as; banks and financial institutions, creditors, debtors, shareholders, customers, suppliers, employees and the overall society members (Timeskuwait.com, 2014). Every group of stakeholders have different expectations of the business and thus managers need be open minded when it comes to matters of social responsibility. Citizens participate in the development of the society. As such, organizations should also contribute to the needs of the society. These contributions may be in monetary terms. Turning a blind eye to the societal needs may is perceivable as if the organization is only interested in own profits and not at all about the development and needs of the community. Organizations create problems for society such as pollution, population displacement, land degradation and should, therefore, involve themselves in solving the problems of society. Organizations should view themselves as part of the society and not just a firm after profits. Corporate social responsibility prevents companies from government interventions and regulations. For example, Ooredoo was the first company in Qatar to launch the e-waste recycling program (Ooredoo.om, 2015). Organization gets their factors of production from the society. They get land from the immediate local communities, labor from the society and some of the capital and entrepreneurship skills from the area where they exist. As such, the organizations, therefore, have the responsibility to pay back the society for all these in other ways other than compensation for those factor inputs. It is upon the citizens, governments, and corporates to take care of the needs of societies. These calls for partnerships between government and corporates, as well as all individual citizens in making sure that the needs of the society are met. These needs are different and, therefore, corporate should take a leading role in meeting such needs. Organizations are big compared to individual citizens and, therefore, have enough resources to cater for the society. Thus, it is only good and right that organizations contribute in a large part to solve the problems facing their communities. Ooredoo has over the years helped in social welfare such as the partnership with the ministry of interior affairs in 2012 in pioneering Emergency Services tailored for people with special needs (Lwin, 2015). After all the contributions and help have been done, the benefits of such activities will eventually accrue to the organizations. CSR acts as a way of advertising the company, as well as creating a good reputation for the company. The community members will, therefore, see the organization as part of their own and thus buy more from it, which increases their profits and wealth in the long run. However, corporate social responsibility is expenditure to the organization and, thus, reduces profits. These profits are the return on investment for shareholders. Hence, it is seen as unnecessary expenditure by some managers. Additionally, managers are not social workers and, therefore, may lack skills to decide which community problems are the most significant. This implies that an organization may be doing corporate social responsibility, but there are no real impacts on the lives of the communities. Firms are also not responsible for their actions, and these bring out the accountability and credibility of some social responsibility. Large firms carrying out social responsibility may gain so much power and control over the citizens. This may bring about conflicts in both business and politics due to their popularity. One cannot give what he or she does not have. Consumers pay for the money used by corporates in social responsibility by buying things at higher prices. Therefore, the products often go for higher prices to compensate for money used for social responsibility. Ooredoo has various major initiatives that show that it is socially responsible. On matters of health, Ooredoo has provided sustainable support to Fahad Bin Jassim Kidney Centre, which provides facilities for 400 patients weekly (Gulf-Times, 2015). In 2014, it signed a partnership agreement with Qatar cancer awareness through a dedicated facility called the Ooredoo cancer awareness Center. It also donates to free medical camps for low-income earners and provides a free medical checkup for staff. On education, Ooredoo has created Qatar Mobility Innovations Centre in Education City with partnerships with local universities. It also helps school events and educational research projects. Application of the Specified Theories to the Challenges Business ethics is a prescribed code of conduct in organizations. Business ethics focus on managers and are concerned with truth, justice and fairness in managerial decisions and actions. Business ethics embraces a myriad of aspects ranging from the competition, advertising, public relations, and corporate behavior locally and abroad to social responsibility. There are three theories that guide ethics in business; the utilitarian theory, the moral right approach and the theory of social justice. The utilitarian theory posits that plans and actions should be evaluated by their consequences and hence the chosen action should produce the greatest good to several individuals. The moral right approach holds that all people have basic rights, for example, freedom of conscience, speech, expression, involvement and no one’s right should be violated. The theory of social justice is of the view that decision-makers should be guided by fairness, equity and impartiality. Employees of Ooredoo ensure that the company is running smoothly on a daily basis (Ooredoo.qa, 2015). Employees always work to ensure common good is achieved. Therefore, such interests of the common good should come before employees’ subjective and self-interests. They need to air their opinions on issues as they are the ones involved in the daily activities of the business. Recruitment, assessment and appraisal of employees should always be carried in a way that is just, equitable, fair and impartial at all times. If all these are the guiding principles of a business, then the employees will have very high performance. Consumers are the target of the business. They are the buyers of the products and services of the Ooredoo. The business should always produce goods and offer services that are demanded by the greatest number of consumers (Ooredoo.com.kw, 2015). Alternatively, their products should always aim, to fulfill the needs of the consumers and increase their satisfaction. In this regard, it is a responsibility of businesses to listen to consumer needs, feedbacks, and complaints. This will help in developing products and services that meet the general and specific needs of every consumer. In matters such as pricing, quantity and quality of products and services the business should ensure that, in spite of their profit-maximizing goal, they are fair to the consumers. They should not exploit or disregard customers. Businesses should always be ethical their activities. The government serves the public good. The aim of the government is to provide services to the people. Governments privatize their corporates to increase efficiency. Businesses should, therefore, aim to serve the common good just like the government. Businesses are regulated by the government and should always ensure that their moral obligations to follow the set rules are not faulted. In addition, businesses pay taxes to governments. Taxes are used to serve the general public. Business should be fair in assessing their taxes. In some cases, ethical behavior is a legal issue. Businesses are dynamic and the environment they run in are at times volatile and unpredictable (Donaldson, 2000). Policies change from time to time. The above three theories guide the business in managing, mitigating and overcoming daily challenges. Employees and managers may act unethically due to various reasons. Some of the reasons may include greed for personal gain, lack of managerial competence, political gains, poor relations, general degradation and pressure brought about by competition, financial constraints, creditors, and politicians. In an effort to promote ethical behavior, the three theories can be used to overcome challenges posed by unethical conduct. The theories will help to institute proper business systems and frameworks in business processes such as recruitment. Disciplinary procedures should be put in place, and every employee given a chance to be heard. As a way of encouraging ethical employees, ethical behavior should be rewarded. Peer review meetings should regularly be held, as well as workshops and seminars to promote employee cohesion and train them more. Conclusion Business ethics is an important discipline in any organizations. It guides almost each and every department of an organization. From the highest ranked manager of an organization to the lowest ranked employee, ethics guides their behavior. Business ethics varies from one organization to another, but there are universal codes of conduct accepted and expected worldwide. CSR is just one aspect of business ethics as discussed. Ooredoo has a clear, well-defined and implemented code of conduct that stands out and is more stable and hence able to achieve its both short-term and long-term goals. Bibliography Al Bawaba, 2015, Ooredoo leads the way in Social Media. [online] Available at: http://www.albawaba.com/business/pr/ooredoo-leads-way-social-media-699458 [Accessed 2 Jun. 2015]. Donaldson, T., 2000, Are Business Managers "Professionals"? Business Ethics Quarterly, 10(1), p.83. Gulf-Times, 2015, Ooredoo celebrates success of World Kidney Day events. 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