Corporate Social Responsibility of Zain Mobile Communications Company - Case Study Example

 Corporate Social Responsibility A Case Study of Zain (Mobile Communications Company) Table of Contents 1. Introduction : Page 3 2. Zain and Corporate Social Responsibility : Page 4 3. Zain: Management of CSR through improvements in workplace conditions : Page 5 4. Zain: Management of CSR through Community Development : Page 6 5. Zain: Management of CSR through development of Education : Page 7 6. Zain: Management of CSR through Environment protection strategies : Page 8 7.  Zain: Management of CSR through Marketplace Management : Page 9 8. Conclusions : Page 12 9. References : Page 14 Introduction The article, Redefining CSR (n. d) has mentioned that Corporate Social Responsibility (CSR) is one way of expressing the obligation of an organization towards the community where it works. The organization exhibits their social responsibility by making of products useful to the society and keeping good relationships with the employees and the community around it (Redefining CSR). CSR is popular business circle at present because organizations have realized that they cannot survive in a community without giving something back to the community for the immense exploitation and utilization of the natural resources which belongs to the community. Nexen (2009) has defined CSR as the pledge taken by organizations work for the social, cultural and economic development of the community in which the organization operates1. Crane et al (2009) has mentioned that CSR has appeared in the history along with the evolution of business activities itself. They have also pointed out that the meaning of business and the relevance of it to the social development etc were discussed at the beginning of business history itself2. CSR can be exercised in different ways. For example, Citibank and some other financial institutions, have formulated certain norms for evaluating the negative impacts of its lending decisions in some developing countries whereas PepsiCo and so many other companies including oil companies and consumer goods manufacturers have expressed their concern about the human right issues by withdrawing their investments from Burma, a country infamous for human right violations 3. Zain, believed to the one among the top three leading mobile telecommunication service providers in Africa and the Middle East, have started its business operations in Kuwait around 26 years before. From an initial customer base of 600000 in only one country, Zain has currently grown rapidly and currently they have around70 million active customers in 23 countries across Africa and the Middle East, having around 13,000 employees at present4. Zain has given ample attention to their social responsibilities which made them one among the bests in the region of Middle East Africa. This paper briefly analyses Zain policies with respect to corporate social responsibilities. Zain and Corporate Social Responsibility Baker (n. d) has pointed out that an organization’s commitment to CSR can be measure with respect to their efficiency in management and the amount of their impact on the society in which they operate5. Zain has taken all the measures to improve their management quality and to execute their commitments to the society which made them popular in Middle East and Africa. Zain’s CSR strategy is based on strategies to improve the conditions of the Workplace, Community, Marketplace and Environment. They believe that the values, ambition, customer satisfaction and mission accomplishment are one and the same and inseparable6. The figure given below is clearly portrayed the CSR strategies of an organization (Baker) Zain: Management of CSR through improvements in workplace conditions   The Zain management has realized that a positive work culture would lead to corporate excellence which is necessary to keep the leading position in the market. For that purpose Zain has encouraged Passion, Ownership, Learning, Developing leadership skills, Enjoying work, Management and business knowledge etc. Moreover, it has incorporated Performance-based remuneration and health insurances for all the employees. Zain dialogue is another strategy adopted for improving the communication between the employees and the management. Training and development facilities were also offered to all the employees at Zain7. Zain has realized that the employees are the major asset for any organization. Employees can make or break an organization. Any strategy neglecting the basic needs of the employees might not be successful in the current organizational world. Employees should feel an ownership towards the organization in order to improve their productivity and efficiency. For that purpose Zain has taken every measure to give ample opportunities for the welfare and the development of the employees. Zain has given more emphasize to prevent workplace accidents. They have taken all the possible safety measures to prevent the risk of accidents happening at the workplace. Moreover, for treating the Zain employees and their families, they have started a fully equipped clinic in Amman, Jordan8   Zain: Management of CSR through Community development Community or the social development is another major aspect of the corporate social responsibility. Organizations need to interact with lot of parameters from outside and inside. All these parameters can affect the company in one way or other. An organization has no existence without a community or a society. Hawkins (2006) has mentioned that the community is the supplier of customers and resources to the organization and hence the organizations cannot neglect the needs of the community9 . The problems of the company are the problems of the society and the problems of the society are the problems of the company and hence the improvements of the community are related to the improvements of the organizations working in the community. Mallen (n. d) has mentioned two types of CSR prevailing in US and Europe. In United States, CSR has been defined in terms of a philanphropic model in which the organizations attempt to make as much as profits without any barriers except the taxes imposed by the governments and a percentage of profits they shared for the charitable causes. European model of CSR, mainly focus on executing the core business in a morally and ethically feasible manner. They complement their business interests by investing in communities for for raising their living standards10. CSR is visualized differently by different countries. Zain has adopted the mixture of the US and the European strategies to execute their CSR successfully. Zain has undertaken many charity activities in most of the countries in which it operates and it also focused on developing the infrastructure of the places where it operates. Zain: Management of CSR through development of Education Education is perceived as the core to Zain's Corporate Social Responsibility which is evident from the policies taken by the Zain management. Africa is a continent which is still struggling to fulfill the educational needs of its people. Poverty, corruption, political instability, lack of resources etc are some of the major causes for the lack of educational levels in Africa. Zain has realized that Africa can develop only through educating its people and they are currently spending millions of dollars for giving proper education to the African people as part of their CSR. Zain has started Build Our Nation program for Tanzania in 2003 and has expanded to other countries. They have already spent US$ 1 million in 2007 and over US$ 1.7 million in 2008 for this program. For Middle East, Zain has started The Future University Network or F.U.N. program for the youth development. It is aimed at improving the leadership skills among university students11. In Bahrain, Jordan, Saudi Arabia and Lebanon also Zain has undertaken many educational activities to promote leadership skills, IT skills, mobile learning solutions etc. Apart from the above sill development programs, Zain has supplied educational aids like the texts, books, school bags etc to the poor students across the Middle East. Moreover, Zain has another educational package of giving scholarships to the bright students as part of their CSR strategies.   Zain: Management of CSR through Environment protection strategies Corporate social responsibility is not all about working for or helping the poor people alone. The way of operations of the organizations is more important than helping the poor. For example, if an organization spends some money for helping the poor and exploit the natural resources injudiciously, we cannot say that such organizations fulfilling their CSR. They should exhibits moral and ethical standards in all their actions. Organizations should neither exploit the natural resources injudiciously, nor engage in activities which are harmful to the environment. Zain always more keen in staying always from activities which cause environmental problems. Zain’s corporate social responsibility mission statement says that they have streamlined the company’s business processes in a socially and environmentally responsible way. They will try to decrease their energy consumption and waste production as much as possible giving all the respects to the environment in which they operate. Responsible usage of resources and the recycling programs undertaken by Zain definitely underlines their commitment to environmental protection12. Carbon emission and global warming problems were taken seriously by Zain and they have zero tolerance towards such issues. Moreover Zain engaged in activities which protect the existing forests along with planting new trees to show their deep concern towards environmental issues.  Zain: Management of CSR through Marketplace management Zain always believe in professional operations in order to cater the needs of the internal and external stakeholders. All the activities of Zain are transparent for the public and they are not keeping any hidden agendas or interests in their business. Moreover, it operates legally and ethically in all the countries where they have established their corporate offices. Zain also offers value added services like; “Pay bills and pay for goods and services, Receive money and send money to friends and family, Send and receive money to the bank accounts, Withdraw cash, Top up their own airtime account or top up someone else's, Send airtime to Zain customers in East Africa, Manage their bank accounts etc”13. Zain has offered lot of other facilities to its customers which the other mobile companies may not offer. Travelling customers can use their services without giving any roaming surcharges. Even the remote areas of Africa is covered by the Zain network as part of their social responsibility even though operations in these place are not profitable to Zain. Even in advertising Zain keeps their ethical behavior. They never create any ads which may mislead the people. Moreover they always look for decent ads and never uses any vulgarity in their ads. Sports is another area in which Zain is more interested. They are giving all the encouragements to the sports persons in Africa and Middle East by sponsoring sports events and giving training kits to the sports persons. Zain has won so many awards for their commitment and sincerity towards social responsibilities. In 2008, Zain in Kuwait won the prestigious Corporate Social Responsibility (CSR) ward in the telecommunication sector. In 2009, The AMAR International Charitable Foundation’s inaugural awards ceremony honored the telecommunications company Zain for its outstandingly generous support of AMAR’s public health and education programs in Iraq. In February 2009, mtc touch-ZAIN affiliate was highly commended during the “Green Awards for Creativity in Sustainability” ceremony for the “Best Green International Campaign” on its “Live Green “campaign. In February 2009, His Majesty King Abdullah of Jordan honored key figures from the public and private sectors for their efforts in serving the local community and enhancing the country's development process (Recognition and Continuity) 14  Geoffrey (2008) has mentioned that many organizations show their CSR on paper alone; but practically they are doing nothing to the society15. Companies always publish projected or exaggerated data about their packages in implementing CSR. These claims may not have even distant relationship with the actual things undertaken by the company. They these tactics to cheat the public and to exploit the natural resources belong to the public in the name of CSR. On the other hand Zain is one of the limited number of companies in the world which practices more than what it declares. Zain is not giving many advertisements to their community service activities. They know very well that the mouth publicity is better than any other means of advertisements for the growth of the company. Connor (2009) has mentioned that when business is in its proper shape, the objectives of the corporate social responsibility may be achievable. But in a like the present one (global recession), it is difficult to anticipate that companies may spend more for executing their socail responsibility16. Big organizations spend little when we compare their profits with the CSR expenditure. It is not possible to evaluate CSR based on the profit and losses of the company. CSR is one of the basic responsibilities of the organizations and it should not be neglected in the name of poor performances of the company of the poor conditions of the economy. Zain has realized the above principle and have exhibited more commitments in implementing it. Source watch (2009) has pointed out the following myths about CSR. Some people believe that the market can compensate for the short term financial gains with long term social benefits. They also believe that the consumer is responsible for making an organization ethical or non ethical17 (Source watch, 2009). These things are irrelevant as far as the corporate social responsibility is concerned. It is the duty of the big corporate companies rather than the public to ensure that the organizations behave ethically. Public have limitations in controlling the big business tycoons and the organizations should never try to exploit such weak points of the public. Conclusions Corporate social responsibility is one of the highly demanded business function in the current world. It is difficult for the organizations to operate by neglecting the needs of the community in which they operate. Organizations have the moral responsibility to spend at least some percentage of the profits they earned through the exploitation of the natural resources in the society where they operate. Big companies are always exploiting the resources of a place and they should compensate for that. Companies should understand that, it can stay in the market only with the help of the customers and the society in which it operates. Neither financial abilities nor the smart governance or management will help the companies in achieving their long term goals, if they fail to execute their social responsibilities. Zain has realized the importance of corporate social responsibility and they have undertaken many projects in education, healthcare, environmental protection, infrastructure development etc in the places where they operate. Zain has a well defined policy towards their social responsibilities and they were keen in conserving the interests of its employees and customers. Zain has given lot of value added services to its customers as part of their social responsibility. They have provided free roaming services and also they have established networks even in rural areas of Africa even though it was not profitable to them. In short, Zain is one of the leading mobile communication service providers in Middle East and Africa which concentrate more on their social responsibility rather than making the profits.   Works Cited 1. “A Message from the CEO”. 2009. 19 January 2010. 2. Baker, Mallen. “Corporate Social Responsibility - What does it mean?”. 19 January 2010. 3. Connor, Michael. 2009. “Trying Times for Corporate Responsibility”. Business Ethics, The magazine of corporate responsibility 19 January 2010 < http://www.business-ethics.com/node/123> 4. “Corporate Social Responsibility”. 2009. 19 January 2010. 5. Crane Andrew, McWilliams Abagail, Matten Dirk, Moon Jeremy & Siegel Donald S. (2008) “The Oxford Handbook of Corporate Social Responsibility”. Publisher: Oxford University Press, USA (October 18, 2009) 6. “Education”. 19 January 2010. 7. “Environment”. 2009. 19 January 2010. 8. Geoffrey, Heal. 2008. “When Principles Pay: Corporate Social Responsibility and the Bottom Line”. Publisher: Columbia University Press (May 1, 2008) 9. Hawkins, David E. 2006. “Corporate Social Responsibility: Balancing Tomorrow's Sustainability and Today's Profitability”. Publisher: Palgrave Macmillan (September 4, 2006) 10. ‘Marketplace”. 2009. 19 January 2010. 11. Nexen. 2009. “Glossary”. 19 January 2010. 12. “Recognition and Continuity”. 19 January 2010. 13. “Redefining CSR”. 19 January 2010. 14. “Workplace”. 2009. 19 January 2010. 15. Source watch. 2009. “Corporate Social Responsibility”. 19 January 2010. 16. Vogel David. 2006. The Market for Virtue: The Potential And Limits of Corporate Social Responsibility. Publisher: Brookings Institution Press (August 1, 2006) Read More