Critique of BMW's Performance - Term Paper Example

Business Table of Contents Table of Contents 2 0Introduction 3 2.0 Examining and Critique of Company’s Performance within Community 4 2 Past andCurrent Performance of the Company 4 2.2. Role of Business towards Community 5 3.0 Implication of Company’s Action on Society and Stakeholders 7 3.1. The Stakeholders of BMW Group 7 3.2. Company’s Impact on Community and Stakeholders 7 3.2.1 Negative Implications of BMW’s Action on Society 8 References 11 1.0 Introduction BMW is a German based automobile company. Since its commencement, the company has manufactured several innovative designs in terms of automobile technology. In its operations, the company also provides considerable significance to contribute to its community and its stakeholders. The stakeholder and the community are the essential parts of the company’s business reputation. Therefore, this paper is entitled to discuss about the company’s performances and its contribution towards the community. The role of company and the implications of their actions towards its society have been explained. The need for stakeholders towards the company and the company’s contribution for the sake of them has been discussed. 2.0 Examining and Critique of Company’s Performance within Community 2.1. Past and Current Performance of the Company BMW Gmbh was founded in 1917. Its chief operations were entitled to the production of engine for airlines. In 1923 the company first produced motorcycle and in 1928 with the acquisition of “Eisenach Car Production”, they developed a new market. The company was involved in production of airplane engine along with other car activities during the Second World War. After this period the company has been recorded to witness continuous growth. In 1951 they first entered the luxurious automobile division and launched BMW 501 (Ploen and Olesen 2010). Another model with V8 engine, the 502 was one of the best creations of BMW. From 1954 onwards numerous versions were available but the sale was not sufficient to reach their profits. Despite facing financial problems they opted to build sport versions of 502 in 1954 (BMW n.d.) After realizing the great potential in the car manufacturing industry, BMW solely focused on manufacturing cars in different innovative designs. Perpetually, the acquisition of Rovert Group was initiated by the company with an expectation for its development which resulted in great failure. Again in 2003, the company acquired Rolls-Royce and extended their brand portfolio. Presently, BMW has become a house of brands comprising of BMW, Rolls-Royce and Mini (Ploen and Olesen 2010). BMW was listed at the top of the Dow Jones Sustainability Group Index (DJSGI) in the year 1999 and 2000, as the world’s leading automobile industry in sustainable development. The increase in the value of companies as recorded on the DJSGI clearly surpassed the Dow Jones Global Index. At the same time in 2000, the value in the C-DAX Automobile Index was decreased by 21 percent and the share price of BMW was raised by 13.4 percent in the same period (BMW Groups 2002). Most of the roads of the world are populated by BMW with its firmly engineered and reliable cars. In spite of these two aspects BMW is also known for its car with high performance as it is built based on production vehicles. They have provided their best efforts for highest-performance road cars (Cohen 1996). 2.2. Role of Business towards Community BMW possess various goals and objective towards community. They are involved in increasing the road safety, creating awareness among people, opposing the violence in the community, fighting against HIV/AIDS, developing educational projects related to schools as well as kindergarten, creating mutual trust within the communities (BMW Group 2008). BMW encourages the exchange of ideas along with the understanding of intercultural aspects by applying variety of cultural initiatives. For BMW Group, cultural engagement has been an integral part of the corporate communications activities for more than 30 years. They provide support of more than hundred cultural projects in Asia, North and Central America, Europe, Australia as well as Africa. It is mainly drawn to make arrangement from architecture and design, music and contemporary art which possess an affinity with the skill and positioning of its brands (BMW Group 2008). Due to its maintenance of corporate culture and goals, BMW Group has chosen these areas for its socio-political commitment. The company attempts to contribute actively to the preservation as well as progress of community within the cities where it is located along with other remote areas. The view of BMW Group is that children in addition to young adults are predominantly vital since they will be involved in shaping the community in future (BMW Group 2008). The Foundation of BMW named as ‘Herbert Quandt’ is devoted in promoting exchange of ideas between politics, science, academic world and community. It considered itself as a "relay station" which transfers academic evaluation in addition to practical capability from different sectors and regions of the world to other areas where they may be used (BMW Group 2008). BMW Group Malaysia was a part of the BMW Malaysian Open 2011 tennis tournament in Malaysia, in which the proceeds that were raised from sales of tickets were provided to benefit ‘National Cancer Community of Malaysia (NCSM)’ and ‘Power Over Cervical Cancer (POCC)’ and to create awareness among the people. Malaysian women are suffering from cervical cancer and it is the third common cancer among the women in Malaysia. 700 women died every year from the attack of cervical cancer. Thus, the company has taken steps to create and sustain awareness among the people (BMW Malaysian Open 2011). BMW has made a profound and important commitment to establishing a workplace driven for the benefit of associates, in the fight against HIV / AIDS. This disease is a challenging factor to develop business in South Africa (BMW South Africa HIV/AIDS Policy n.d.). In South Africa, BMW plant provides supports to the physically along with mentally retarded citizens in several ways. Along with supplying clothing, educational material and toys to local schools, the company also provides sponsorship to the ‘Soshangu’ which is a project for mentally unwell children. This provides them the opportunity to learn special skills such as sewing or carpentry and earn their livelihood (BMW Groups 2002). The company in order to protect environment and to achieve success in business develop various techniques. The policies of BMW Group are intended to follow both these objectives by constantly applying a sustainable mobility model. The company is planning to focus on the development of innovative and advanced technologies related to manufacturing of the car and also to reduce maximum consumption of fuel. In place of the older technology newer models will be engineered for range of production vehicles. The newer segments of market will be discovered with innovative models which will be introduced at the lower end of the market. The latest model of BMW 3-series compact car by means of ‘Valvetronic’ technology will be introduced shortly accumulated with gasoline powered engines. In future, the engineers of BMW will maintain to build up lightweight and low consumption vehicles. The company has also announced plan to introduce advanced technologies with hydrogen-powered engines with the title, BMW 7-series car (BMW Groups 2002). 3.0 Implication of Company’s Action on Society and Stakeholders 3.1. The Stakeholders of BMW Group The stakeholders of BMW are classified into two categories primary along with secondary. Primary stakeholders include employees, wholesalers and retailers, stockholders, creditors, customers, suppliers along with competitors and secondary stakeholders include governments, social activist groups, business support groups, local communities, and media, on addition to public opinion (Stamoulakis and Bridwell 2009). As a globally dynamic automobile manufacturer of car, the BMW Group undertakes various responsibilities for the environment along with for the social interests of entire groups of employees and community. With this new Sustainable Value Report in 2001/2002, a commitment was made apparent to the public and it was shared with all the stakeholders such as customers, employees, politicians, representatives belonging to non-governmental organizations, the media, suppliers, and the local communities where BMW plants are situated with the purpose of creating a sense of belief in the company (BMW Groups 2002). 3.2. Company’s Impact on Community and Stakeholders BMW Group is committed in making a contribution to community above and ahead of an economic one (BMW Education Programme 2008). For the BMW company customer satisfaction and loyalty is the key aspect. The company needs to understand the customers’ expectations and based on this they develop reliable and high-quality products. Due to its activities towards community it creates a positive impact on the community (BMW Group 2008). The company has developed various areas for product responsibility which has an impact on the community as well as the stakeholders. They reduced consumption of fuel and CO2 emission in order to maintain the environment. As a result the stakeholders of the automobile industry would not be affected. For the sustainable development of the community electric car along with hydrogen mobility solutions are developed. For the safeguarding of the community, safety concept is developed to prevent accident. To advance the flow of traffics they are working on projects. They also go for product recycling (BMW Group 2008). The various activities and performance of the company has a positive impact on the community as well as stakeholders. 3.2.1 Negative Implications of BMW’s Action on Society It can be observed that BMW is performing several activities towards creating benefits towards the society and their stakeholders. But, in the UK in 2010, there was a ban placed on BMW from showing certain ads by the advertising watchdog of the UK. BMW had claimed through the banned ads that its Concept ActiveE electric car was “100 percent joy, zero percent emission”. The ban was placed on BMW for misleading their consumers i.e. their community at large (Sinclair 2010). They were also charged of breaching a code that the organization had promised to adhere to on substantiation, environmental claims as well as on truthfulness. The car was presented to the people i.e. to the community at large as a “zero percent emission” as well as “zero carbon dioxide when driving”. But, the car had to be recharged with electricity by using the national power network resulted in creation of emissions. Thus, this kind of incident has tainted the image of BMW to a certain extent among its trusted community (The Telegraph 2010). 4.0 Conclusion With reference to the above analysis it can be stated that BMW is a global car manufacturing company which is playing a tremendous role in safety and security of environment and community. It has achieved huge success since its inception and creates various path breaking technologies to be a competitive leader in their segment. BMW has developed various strategies and played a significant role in safeguarding the environment and community. For the welfare of stakeholders BMW adopted several measures. The stakeholders have an expectation for world class car from the company with environment protection. As a result, the company has provided importance to environment by reducing carbon emission by introducing its electric car models in the international market. References BMW. n.d. Model History. Accessed March 24, http://www.bmw.com/bmwhistory/com/en/1956/automobiles/media4/AUT_56.pdf BMW Groups, 2002. BMW: Automotive Industry Leader in Corporate Sustainability. http://www.bmwgroup.com/publikationen/e/2002/pdf/sustainable_value_report_en.pdf BMW Group, 2008. Overview. http://www.bmwgroup.com/e/nav/index.html?http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/verantwortung/gesellschaft/gesellschaft.shtml BMW Malaysian Open, 2011. Tickets sales proceeds to benefit National Cancer Community of Malaysia (NCSM) & Power Over Cervical Cancer (POCC) Campaign. http://www.bmwmalaysianopen.com/news/tickets-sales-proceeds-benefit-national-cancer-community-malaysia-ncsm-power-over-cervical-cancer BMW South Africa HIV/AIDS Policy, n.d. BMW: Up in Arms against the Spread of HIV / AIDS. Accessed March 24, https://members.weforum.org/pdf/Initiatives/GHI_HIV_BMW_AppendixA.pdf BMW Education Programme, 2008. UK Sustainable Value Report 2008. http://www.bmweducation.co.uk/downloads/online-resources/BMW_Sustainable-Value-Report-2008.pdf Cohen, Jonathen. 1996. BMW M-Series and Performance Specials. UK: Motor Books International. Ploen, Rasmus Ramshoj. & Olesen, Mikkel Kronborg. 2010. Valuation of BMW. http://pure.au.dk/portal-asb-student/files/10730/Valuation_of_BMW.pdf Stamoulakis, Dimitrios. & Bridwell, Lawrence. 2009. BMW’s Approach to Global Warming and Environmental Management: Corporate Social Responsibility Or Greenwashing? http://larrybridwell.com/BMWcsrPaperSept09.pdf Sinclair, Lulu. 2010. BMW Told To Put Brakes On Zero Emissions Ad. http://news.sky.com/skynews/Home/UK-News/BMW-Advertisement-Banned-After-ASA-Dismisses-Zero-Emissions-Claim-On-Concept-ActiveE-Model/Article/201007415671803 The Telegraph. 2010. BMW Banned From Claiming Concept ActiveE Electric Car Is Zero Emission. http://www.telegraph.co.uk/motoring/news/7911913/BMW-banned-from-claiming-Concept-ActiveE-electric-car-is-zero-emission.html Bibliography Buckley, Martin. & Dimbleby, Nick. 2002. BMW Cars. US: MotorBooks International. Holmstorm, Darwin. & Nelson, J. Brian. 2009. BMW Motorcycles. US: MotorBooks International. Illingworth, Patricia. 1990. AIDS and the Good Community. UK: Routledge. Lewin, Tony. 2004. The Complete Book of BMW: Every Model since 1950. US: Motor Books International. Read More