Corporate Stakeholders and Response to Their Issues - Research Paper Example

TRANSAMERICA of Table of Contents Table of Contents 2 Introduction 3 A History 3 B Corporate stakeholders and response to their issues 4 C.) The role of the industry in its social, economic, and political setting 6 D.) Domestic and international ethics 7 E.) Ecological and natural resources 9 F.) Social issues 10 G.) Rating of the industry’s overall social responsiveness 11 H.) Saint Leo University Core Values Rating 12 Conclusion 14 References 15 Introduction Buhmann, Roseberry & Morsing (2011) opined that mean the demand of business ethics and social responsibilities are increasing in the globalised businesses. Corporate social responsibility can be defined as the assessment of roles and responsibility of companies for their stakeholders. Firms are responsible to maintain positive effects on environment and society. Mainly, firms are required to develop a sound relationship with the stakeholders. Global firms are adopting various benevolent strategies for the environment and society for gaining growth and sustainability. On the other hand, business ethics refers to the set of actions that are increasing control over the potential conflicts like corporate governance, corruption, insider trading and employee discrimination. In the current study, Transamerica Life Insurance Company is selected to outline the various aspects of CSR and ethics (Doyle, 2011). A.) History Transamerica Corporation is having a prolonged history of controlling different life insurance and investment firms. The American company is having different entities in around the world. Amadeo Giannini established the organization in the year 1904 with the help of the ‘Bank of Italy’ and used the name of ‘San Francisco saloon’. Actually, his aim was to provide financial services more easily so that maximum number of people can use products. He started to provide financial support to different person from the year 1906. Giannini started with a temporary bank in the San Francisco docks area, which provides industrial, contractual loans very easily (Transamerica.com, 2015c). In the year 1928, new strategy adopted by Giannini as his organization merged with ‘Bank of America’. In the year 1930, the “Transamerica Corporation acquired the Occidental Life Insurance Company” (Transamerica.com, 2015b). Moreover, in the year 1956, management of the firm separated the banking and life insurance businesses segment as the Transamerica. San Francisco skyline was launched after Transamerica was launched (Transamerica.com, 2015b). During the two decades 1960 to 1980, the organization has faced huge challenge. Transamerica gained higher interests among the global financial market with the help of inventiveness and acquisition. They started providing various life insurance and financial services to the normal and institutional clients. Their major clients are like “motion picture distributor United Artists, Trans International Airlines and Budget Rent A Car” (Transamerica.com, 2015a). During the year 1980, Transamerica again considered that providing insurance coverage and financing peoples are the major roles. Henceforth, with the help of regeneration strategies helped the firm to merge with Aegon N.V during the year 1999, it is one of the leading global financial groups. Financial service quality and diversification increased a lot. They are still providing financial support and insurance support to the common publics and different organizations. However, they are offering wider range of financial services like diversified plans for life insurance, retirement plans and provide more security for the financial investment (Transamerica.com, 2015b). B.) Corporate stakeholders and response to their issues Banking and financial industries includes the stakeholders like investors, employees, economic and financial aid seekers, financial advisors, financial institutions, locality, government and other environmental sustainability organizations (Aḥmad & Crowther, 2013). Similarly, Transamerica have the same range of stakeholders and they are supposed to increase the set of strategies for welfare. Mainly, the organization has to be concerned for environmental protection and corporate governance. The organization is planning to increase the green responsibility in the near future by aiding the rain forest. After the financial recession, people lost their trust on such institutions and risk of losing the invested capitals increased (Doyle, 2011). Social responsibility of Transamerica is also aiming to increase social responsibility. Management of the firm is planning to use the alternative renewal energy sources like the solar and wind energy. Moreover, the firm is enjoying the opportunity of providing sustainable investment funds for various organizations (Gavai, 2010). It has been observed that the socially liability strategies of the clients are converted into mainstream action. Global market has grown to $6.57 trillion during the year 2012 from the amount $3.74 trillion. During 2015, $763.4 million raised through the new segment of the financial service (Transamerica.com, 2015a). Transamerica started to train their service personnel in order to gain more reliability in terms of service provisions (Hsu, 2011). Transamerica is becoming more socially responsible with the help of various investments made in the welfare of environment, society, and government firms. The American company is facing the challenge of the social discrimination between the black and white complexioned people. Conflict among ethnic groups will misbalance strategic fits and management action. On the other hand, social development strategies also include the role of “Charitable Agents” (Martin, Nishikawa & Qi, 2009). Transamerica is aiding national governments with required funding benevolently. The firm is providing economic support to the local booming industry charging lowest interest rate. Such policy will increase the rate of growth of small and medium regional industries. Such firms will be able to increase the compatibility against globalised firms. Henceforth, GDP of country will increase gradually (Lehtonen & Liukko, 2011). Transamerica is maintaining fair relationship with the governments and financial controlling authorities. The firm is paying out proper tax and other tariff charges to the governments and other financial authorities. Their parent company Aegon helped them to become more responsible to the society and gain more trust from global investors and financial help seekers (Paliwal, 2006). C.) The role of the industry in its social, economic, and political setting Transamerica is one of the major life insurance companies in the world. They are maintaining their social, economic and political responsibilities very well (Transamerica.com, 2015a). The firm segmented their social and economic responsibility for the stakeholders into different segments. Transamerica Foundation negotiates support categories, they are granting US currency to various non-profit firms in order to increase support of the firms. Arts and Culture: Social development initiatives are promoting the local music and performing arts. The firm is also helping the junior artists in developing their talents (Radermacher & Brinkmann, 2011). Municipal and Community: The Transamerica is providing aids for the various small organizations, which are helping in developing the local community and economy. More people are getting the chance of employment. Education and Literacy: Employees are trained in terms of meeting customer queries. On the other hand, Transamerica is funding different educational trusts, local school colleges. It helps the society to increase rate of literacy and education (Smith, 2010). Health and Welfare: Health and life insurance programs of the firm are providing different food and nutrition chart. Transamerica has arranged accommodation for homeless and offering various treatment schedules. Ceremonial activity: Transamerica arranged various association events, which helps in developing highly integrated relation among the employees, investors, loan candidates and local authority. Such strategies are increasing the social recognition of Transamerica in the global segment (Rahmani, 2014). They are also donating in various government funds and political accounts for the welfare of locality or neighboring areas. They are also concentrating on developing infrastructure of the locality. D.) Domestic and international ethics The firm Transamerica started their funding support from the American internal areas, but the collaboration with leading insurance company Aegon, they started to provide their financial and insurance support to the international clients also. Thus, Transamerica have to maintain certain set of ethical standards which helps the firm in creating effective image. In the post financial crisis, time investors became highly concerned for ethical issues like corporate governance, corruption and insider trading. Moreover, financial service industry is demanding certain standards that are going to safeguard different stakeholders associated (Scholtens, 2011). Major national and international ethical responsibilities can be outlined as follows; Professionalism: Transamerica are ensuring high professionalism among the employees or the insurance consultants. Employees have to check the status or the background of financial help seekers. The lending and insurance coverage will not depend on any emotional or personal connection with the clients. Such professionalism will be mitigating the challenges of biasness among the consultants. Therefore, Transamerica can avoid favoritism and corruption threats (Radermacher & Brinkmann, 2011). Integrity: The firm is responsible to integrate various government and controlling authority rules and regulation. Mainly, such strategies are increasing business ethics of the firm and Transamerica can provide their financial support and services in a more responsible, accountable, clear-cut and trustworthy approach. The firm will be able to increase loyal customer base in the global segment. Fairness: While providing the financial support and services, Transamerica have been fair enough with the clause and interest or return rates. It can be said that the global financial operations of the firm is increasing the rate of the fair dealings, lucidity and honesty in their operations in terms of creating positive brand image. Parent company, Aegon, is forcing the firm in developing fair trade ethics. Moreover, equal treatment for the insurance clients, financial service employees, equity shareholders, market and social community will increase the fair trading trait among the organization (Martin, Nishikawa & Qi, 2009). Confidentiality: Transamerica’s business ethics must ensure privacy for sensitive information of the clients and investors. The firm use to take permission before using the personal data of customers. Customer’s reliability, satisfaction and loyalty in the global segment are depending on the safety and security offered by Transamerica. Therefore, Transamerica is offering higher confidentiality for their international clients. Objectivity: The firm is aiming to promote impartial attitude for the customers and employees. Mainly, interest conflicts, undue influence and cultural biasness are strongly handled by Transamerica (Doyle, 2011). E.) Ecological and natural resources In the contemporary world, environmental sustainability challenges are increasing for the global firms. It has been observed that firms are facing the scarcity of natural resources and ecological issues. Transamerica is a part of Aegon, which is the largest insurance and mutual fund company in the world. Thus, the firm must be developing proper strategies in terms of using the environmental and natural resources optimally. Mainly, power, paper, fuel and land area are the major resources that are used by the firm. Transamerica adopted several corporate social responsibility and ethical business strategies (Lehtonen & Liukko, 2011). Social development investments of Transamerica are increasing rapidly. Mainly, the investments are made in terms of developing atmosphere and societal factors. Corporate governance of the firm is increasing funding on the alternative energy usage. Energy sources like solar and wind energies are used in official and administrative blocks of organization (Transamerica.com, 2015b). These policies are increasing the reliability and sustainability in the international market. They will be attracting investors with the help of sustainable investment segments. Financial advisers can promote the ethical investment among the clients and investors. Environmental sustainability issues are also increasing rate of investment interests and priorities among global investors. Transamerica’s ecological policies are safeguarding common environment and society. The firm is using the strategies like carbon footprints, carbon credits, and green environments. These factors are increasing the rate of sustainability and growth in the global insurance and financial market (Martin, Nishikawa & Qi, 2009). F.) Social issues Transamerica is an US based firm, which is facing the challenge of diversified culture and social backgrounds. The peoples of financial consultancy must have proper idea about the background of investors and loan seekers. Such trait will be helping the clients in obtaining best possible financial consultancy support. Transamerica advisers will be able to gain an insight about the values of clients and gradually develop interactive relationship. In addition, social issues refer cultural and economic prosperity difference. In the post crisis period, people were facing unstable income generation thus; they were quite hesitant in making investment in life or health insurance segment. Thus, service personnel need to be aware of economic and personal background of the investors and loan seekers. It will gradually increase potential of gaining success (Smith, 2010). In addition, social backgrounds also determine the risk taking ability of the potential customers. Insurance investment involves high risk. Transamerica collects money investment from insurance segments and uses the same in lending third parties. Such policy has the risk of borrower solvency. Short term investment are selected by the highly risk friendly peoples. On the other hand medium or long term investments are used by the peoples who are mainly safety seekers. People, based in USA are looking for dividend-paying fund which could give them more possibility return on investment. Transamerica Short-Term Bond got huge popularity in America but it faced failure in gaining customer interest in the European segment (Rahmani, 2014). G.) Rating of the industry’s overall social responsiveness Transamerica is a part of the Aegon life insurance company and they are using corporate social practices in order to catch the attention of global customers. Usurious practices: Transamerica is collecting money from American investors with assurance of protecting and growing the money. However, they are lending the money to various local and international firms in lieu of certain interest rate. Being a part of the Aegon insurance, group management of the firm is aiming to reduce usurious actions. They are providing loans ethically and giving the proper return to investors (Scholtens, 2011). Speculative actions: It has been observed that Transamerica is collecting funds as insurance premiums. Mainly, they are using the money in lending local firms in order to develop their infrastructure. Financial analysts of the firm are judging the background of the firm and developing the infrastructure. Therefore, it can be said that the risk of speculation is quite lower in such investment. Investors are enjoying assurance of the brand image of Aegon. Transamerica can be ranked as lower speculative risks (Radermacher & Brinkmann, 2011). Human right: Most of the investment of the Transamerica goes to the local American firms. Mainly, the firms are manufacturing or providing service to the American clients. Therefore, Transamerica is able to maintain the human rights and they will be ranked higher in this segment. Financing companies having social responsibility: During the background checking process before giving professional or commercial loans, Transamerica justifies CSR responsibility of loan applicants. However, it has been observed that maximum financial industry firms are granting credit facilities to firms without checking the CSR responsibilities. Transamerica is an exception of the normal insurance firms. Therefore, in this CSR responsive segment, it can be said that the firm can be ranked higher (Lehtonen & Liukko, 2011). Environmental impact: Transamerica and its parent company, Aegon, is giving importance on the ecological impacts of the business operations. The firm is also justifying the usage of the funds in terms of social and ecological impacts. It has been observed that many branches of Transamerica in American segment are using solar energy for lighting and other operations. In addition, while aiding various firms, rate of ecological damage are checked (Aḥmad & Crowther, 2013). However, Transamerica will get lower ranks in the segments of benevolent activity, donations and sponsorship. Parent company Aegon is having such strategies, but Transamerica do not have such strategy. In addition, the firm will be getting lower rank in terms of a social enterprise (Buhmann, Roseberry & Morsing, 2011). H.) Saint Leo University Core Values Rating Saint Leo University is mainly a regionally accredited educational institution which started to emphasize on environmental factors. They are promoting certain core values which are used as guidelines by various American and global firms (University, 2015). Excellence: This value of Saint Leo University explains that organizations must be able to work both independently and jointly. Transamerica need to develop ethical characteristics among the employees as they are providing financial support among the customers. Moreover, the firm is lagging in employee’s skills development, which some time limits the accuracy of decision making the consultation support. Transamerica must introduce employee training schedules (Scholtens, 2011). Community: Being an insurance company, Transamerica is using their raised funds in developing local companies. They are helping the local, small and medium scaled companies with low interest funds. The firm is engaging employees very well and they are planning to recruit their staff from the American locality only. In addition, Aegon is the parent company of Transamerica and they are investing high amount of money in developing community. The firm started to use renewable energy sources and low pollution creating operational system which will help Transamerica in gaining higher rank (University, 2015). Respect: Transamerica is able to manage the employee’s diversity very well. They are reducing the cross cultural conflicts with the help of different strategies like sports or games, interactive seasons, orientation programs and different entertainment programs. Such process develops respect and unity between the employees (Rahmani, 2014). Personal Development: Training and development schedules of Transamerica are developing skills and knowledge of the employees. Entry level graduates will be getting best possible brush up for their career. Responsible Stewardship: Transamerica is aiming to utilize their resources optimally. They are using the Aegon Transamerica Foundation to explore the local human resource. In addition, they are using collected funds among the local small and medium sized firms. This would help the firms in increasing competency against the changing world (Radermacher & Brinkmann, 2011). Integrity: Transamerica is using a pyramid strategy that synchronizes roles of each and every individual employees, consultant, investors, government and loan seekers. Aegon and Transamerica management tries to increase the integrity among the operations. Moreover, the firm is dealing with financial instruments like mutual funds which involves high rate of market risk, even loss of principle amount also. Integrity ranking of Transamerica is higher for their responsible actions (Martin, Nishikawa & Qi, 2009). Conclusion From the current study, research has been done an ethics and corporate social responsibility strategies of Transamerica. The firm is positioned in the top level of the financial services industry in the world. It has been observed that their ethics and companies are related to its global services. In terms of providing financial supports like insurance, investments and other debt related service to more than 27 million customers they are using the ethical norms. The firm is aiming to develop neighboring society with the help of various CSR strategies. They are also acting ethically in terms of getting sustainability and achieving growth in the international financial market. From the research study, it is obtained that Transamerica is having fair ranking as per social responsiveness and Saint Leo University prompted core values. References Aḥmad, J. & Crowther, D. (2013). Education and corporate social responsibility. Bingley, U.K.: Emerald. 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Florida Catholic University. Saint Leo University. Retrieved from http://www.saintleo.edu/about/florida-catholic-university.aspx Read More