Ethics and Social Responsibility of Etisalat Company - Report Example

Company Ethics and Social Responsibility Analysis: Etisalat Name Course Tutor Date Company Ethics and Social Responsibility Analysis: Etisalat Abstract This report is drafted to analyze the Ethical Codes, practices and socially responsibility activities of Etisalat Company. It does this in view of the increase in unethical issues even with increase of corporate social responsibility. Most companies today involve themselves in CSR as part of their roles. Etisalat Company too is frequently engaged in CSR although its not part of their main business. Nevertheless, it has ethical standards but it does not practice them fully, which raises the question as to what extent Etisalat Company adhere to ethical practices. The research uses survey method to gather information from the customers on Etisalat Company engagement of ethical issues and corporate social responsibility. Questionnaires were given out randomly to the customers to gather the primary data and their respective customers around Dubai. Table of Contents Company Ethics and Social Responsibility Analysis: Etisalat 2 Abstract 2 Table of Contents 3 1.0 Introduction 4 2.0 Aims 5 3.0 Literature Review 5 3.1 Ethical and Social Responsibility 5 3.2 The extent to which Etisalat is ethically responsible 6 3.3 Etisalat Code of ethics 9 4.0 Research methodology 10 4.1 Research Design 11 4.2 Sample Design 11 4.3 Sample Selection 11 4.4 Result and Discussion 11 5.0 Recommendations 12 6.0 Limitations 12 7.0 Conclusion 12 8.0 References 13 1.0 Introduction In the recent past, corporate governance has drawn a great public interest owing to its apparent significance for the economic wellbeing of companies and the general society (Jacobs, 2004, p.17). The news of the past few years, especially portrayed sad narratives of lack of corporate ethics in companies like WorldCom, Qwest Communications, Anderson, Enron, Boeing, and Computer Associates among others. Jacobs (2004, p.18) explains that corporate failures, falling stock markets, corporate power abuses, few CSR activities and doubtful accounting practices have been witnessed and criminal investigations show that the whole economic system in which the investment returns have relied in is demonstrating indications of stress which have weakened the investor’s confidence. Some companies have expanded in a dramatic way and within a short time despite of customer complaints (Grace & Cohen, 2005). One of such company in which customer have complained of its charges both locally and internationally is Etisalat. Etisalat which is also called Emirates Telecommunications Corporation is a multinational telecommunication services provider based in UAE (Etisalat, 2014). According to Thompson (2009), the company has also been accused by BlackBerry for tapping its information through their Eavesdropping software in 2009. Currently, it operates in 15 nations across the Middle East, Asia, and Africa. In 2014, Etisalat Company is rated as the largest mobile network operator in UAE and 12th globally (Etisalat, 2014). The company has up to 150 million customer base expecting quality and ethical services on a daily basis. Etisalat is regarded as one of the major Internet hubs in UAE and the Middle East, offering connectivity to many telecommunications service providers in that region (Etisalat, 2014). The company is also the biggest carrier of global voice traffic in Africa, Middle and 12th major voice carrier globally. 2.0 Aims As the largest telecommunications company in AUE, it has attracted attention of stakeholder and researchers making the exciting company to analyze. Some of the complaints have come from the customers, BlackBerry Company and the un-procedural acquisition of PTCL Company. Hence, the information this report analyzes is the extent to which Etisalat is ethically responsible. The aim of the paper is to demonstrate why ethical and corporate social responsibility is important for an organization. 3.0 Literature Review 3.1 Ethical and Social Responsibility Ethics is defined as a collection of principles and concepts which guide humans in recognizing what behavior assist or injure conscious creatures. In the perspective of a company, it is the principles which help the company and stakeholders understand what is good for them and what harms its image (DeGeorge, 2010). These principles can be either be written or are just made part of the organizational culture which new members of the company can observe on the existing members. The company must integrate ethical practices in its production, marketing, selling, human resource management, workplace conditions and waste management, etc. This is what emerges as the business ethics to which member of the organization subscribes to. On the other hand, corporate responsibility is where the company feels it has a sense of the responsibility towards the environment and society in which it operates. It is normally incorporated into the business model (Oketch, 2004, p.6). CSR policy works as an integrated, self-regulating process in which a business checks and make sure its activities conform to ethical standards, spirit of the law and global norms (Sharbatoghlie, Mosleh & Shokatian, 2013, p.328). Here, the company participate and try to help in some of the problems that are facing the Society. Based on the literature, this report analyses the extent to which Etisalat is ethically responsible. 3.2 The extent to which Etisalat is ethically responsible Since its inception, Etisalat has grown to several countries and is now operating in Middle East, Asia, and Africa. With over 150 million customers all over the world, the company has a responsibility to satisfy the needs and wants of its clients. True to that, the company has tried to remain ethical and responsible in its operations. Etisalat (2014) argues that, it has set code of ethics to guide the management and employees to adhere to proper practices which is also viewed by philosopher and the society as morally correct. The company has participated in many initiatives which influence the society positively. This creates the image that Etisalat not only interested in making profit but also care for the social welfare of the society in which it operates (Jacobs, 2004, p.21). However, like many other big companies Etisalat has failed in some aspect of ethical issues including transparency and confidentiality. According to Etisalat’s website, the company works in line with the core traditions, cultures and the society’s way of life in every market it operates (Etisalat, 2014). Etisalat conforms to the laws and policies being adopted by Ministry of Labor and Social Affairs in AUE. Therefore, the company code of ethics is well stated. Etisalat’s code of ethics states that it is morally wrong to accept forced labor in their company. It recognizes in right to choice, and its employees are employed in their personal volition to work for the company. According to the company’s Website, Corporate Social Responsibility practiced by Etisalat revolves around health and the environment (Etisalat, 2014). The company is a member and a participant of United Nations Global Compact, an act which has transformed its ideas of CSR, made it to introduce trends such as “Cause based CSR” and other numerous programs in the areas of environment, humanitarian aid, sustainable development and special needs (Etisalat, 2014). Etisalat is offering clean water in Egypt through its CSR “Origin” initiative. (Etisalat, 2014) The nation-wide initiative is operated in cooperation with international bodies and other development agencies. The company is also usual participant and member of the Arab Corporate Environmental Responsibility Summit. In the same summit, Bin Ali presented a topic on cultural and educational activities (Etisalat, 2014). According to the company press release of 2007, Etisalat also sponsors Clean the World Campaign. The company also started a program to maintain its endeavors on environmental preservation and protection. It does this by trying to recycle the mobile phones (Etisalat, 2014). Etisalat (2014) reports that in 2007, the company established “mobile phones recycling and collection points at its headquarters and across its native country UAE”. The program persuades customers to submit their dead mobile phones for appropriate and secure disposal. The company press release of 2010 reports that more recently, to be precise in 2010 Etisalat took part in commemorating the Earth Hour in all the seven Emirates of UAE. Another thing that Etisalat is absolutely confident of is its HR systems which has earned it ISO: 9001-2000 certification (Etisalat, 2014). As reported by company press, HRD Etisalat did another significant activity in its skilled development when it fruitfully got certification from a globally-known agency. In the same report, the Executive Vice President (HR) of Etisalat, Al Sawaleh, distinguishes its workers to be their most important asset (Etisalat, 2014). He further went ahead to claim that “In the fresh competitive and international market the company are to expand to, it is significant that their staff have the capability to carry out their work in the most efficient way possible. They were also giving them all opportunities to get better of themselves in a progressively and healthy work atmosphere” (Etisalat, 2014). Months before its certification, Etisalat Human Resources department won prestigious award on behalf of the company. This award was concerning the conformity of Etisalat to nationalization initiative of the UAE government. This award is commonly referred to as Emiratisation. It was awarded by the GCC Council of Ministers of Labor and Social Affairs in appreciation of “unparalleled success in implementation of recruiting practices and training plans by Etisalat which have proved vastly effective for both its staff and the company” (Etisalat, 2014). The company also has been involved in promoting sports in Egypt. Mohamed (2011) claims that in 2010, Etisalat signed shirt sponsorship with Ahly football club for a period of three years. However, Etisalat has also failed in some ethical issues during its operations. According to Thompson (2009), BlackBerry accused Etisalat of creating software which eavesdrop its information. It is claimed that the software facilitated the corporation to monitor communications on the devices BlackBerry to its servers. Tapping the information of another company is wrong because it gives you access to their trade secrets, in turn give your company unfair market advantage. In another situation, Etisalat was criticized for not being transparent and also for violation of procedures and rules in acquisition of PTCL (Dawn, 2010). 3.3 Etisalat Code of ethics The Code of ethics sets out the basic standards that guides Etisalat’s staff in their daily activities in support of the corporation and look to encourage ethical and honest conducts (Etisalat, 2014). Etisalat code of ethics claims it is critical to the success of the company to conduct business with integrity and honesty and in observance with all related legal and dogmatic requirements. The code of ethics also calls for transparency in dealing with customers (Anand & Rosen, 2008, p.98). The company Code is revolves around four major principles, aimed at guiding ethical decision-making and behavior. They include respecting the intrinsic dignity of a person, acting based on a well informed principle, participating as part of the community of telecommunication service providers, and upholding the public interest first (Etisalat, 2014). The code holds that all stakeholders consisting of management, employees, customers and investors are equal as human beings and therefore should be treated with dignity while upholding their rights to build a cohesive society (Chapple & Moon, 2005, p.416). The company has remained true to this principle treating their stakeholders with respect both home and abroad. This extends to quality customer service and respect between individual employees. In fact, Etisalat has won an award in the past with regards to good human resources management (Etisalat, 2014). Their right to quality services has also been upheld making Etisalat the largest telecommunication company in UAE. Grace & Cohen (2005) contends that the code also works to ensure the members of the organization act based on an informed conscience. Etisalat top management and employees are like any other human being who interact with other member of the society and understands what is ethically right and what is ethically wrong. As such, they should use their conscience to embrace the best principles which are good for the health of Etisalat. The company has never had complaints with its adverts and way of marketing, meaning to a large extent; it has remained ethical. However, the company has had large support from government creating monopoly in telecommunication sector. This situation is not economically viable for the economy of the country which wants to promote its businesses under fair practices. Customers have also complained about higher charges on international calls creating a negative image on the company. It can then be argued that Etisalat has risen to its prominence through exploitation. The code also requires the Etisalat management and employees to uphold the interest of the public (Etisalat, 2014). Etisalat as both a public and private company, must work to satisfy public needs through integrity, honesty and transparency. They should be ensured in their accounting and reporting. The company has tried to do this through press release, pre-tax profits announcement both quarterly and yearly. According to Etisalat (2014), documented format of their press release can also be accessed in their website. 4.0 Research methodology The research conducted survey seeking the opinions of the customers about their perception of Etisalat’s products and services. The study employed both qualitative and quantitative methods in this research. Questionnaires were used be issued randomly to a sample population selected around Dubai staff to collect the primary data. 4.1 Research Design The design used for this research project was a survey research. According to Creswell (2008) The method is an efficient way to obtain information needed to describe opinions, characteristics and views of customers on ethical and social responsibility issues. 4.2 Sample Design The key objective in survey was to gauge customer thought. The survey design that was employed to gather primary data was the SERVQUAL questionnaires. The questionnaire comprising of 15 statements of customer service perception characteristics categorized into four dimensions service quality that was focused on. Participants were asked to present their ratings of ethical and social responsible perceptions. The statements used in this survey was rated through a five-point Likert scale, with 1 showing STRONGLY AGREE; 2 AGREE; 3 DISAGREE; and 5, STRONGLY DISAGREE. 4.3 Sample Selection A sample of 120 customers was selected from Dubai area for the survey. The Non-probability sampling was used in the survey for picking the research respondents. Applying Non-Probability, also called convenient sampling. It enables the marketer to establish and distribute questionnaires to individuals who have in the past and presently subscribes to Etisalat in which the study focuses on. 4.4 Result and Discussion Data was analyzed by quantifying participants’ answers of their degree of agreement with the set statements used to assess customers’ perception of ethical and social responsible practices. The average value for people who strongly agree that Etisalat was ethical and socially responsible was constantly near 1 in the five-point scale. In number, the people who were in strong agreement were 46. People were agreed were 57, at had the score of 2 at the Likert scale indicating moderate agreement. People who disagreed were 12, and the number on Likert scale was at 3, which is slightly moderate. Lastly the people who strongly disagreed with the notion that Etisalat was ethical and socially responsible were 9 with a score of 4 in Likert Scale. 5.0 Recommendations Emirates Telecommunications Corporation must improve their ethics and social responsibility. The research has demonstrated that upholding ethics in organization operations is important for the future and trust of the company. The company violated the partnership agreement with BlackBerry by monitoring its information, an act which violates the ethical principle of confidentiality. For that reason, the company has a huge task of improving to other partners that they can be trusted with their data of information. With ethically problems increasing with the stories of Enron and other companies Etisalat Company must be strict in its auditing and accounting to ensure every stakeholder, mostly are held accountable to their work. 6.0 Limitations Etisalat is present is several countries, and more 150 million customers all over the world. This research only sampled 120 customers which were only based in Dubai. As such, this number is so small that may not represent the general view of the all customers. Another limitation is that LIkert Scale may be difficult for some people interested in research to understand. 7.0 Conclusion From the study findings, this report can conclude that consumers’ expectation of ethical and social responsibility are higher with regards to Etisalat Company, thus this proves their adoption of several CSR programs to help improve their customer retention strategy. Consumers hold high ethical expectations which if not fulfilled by Etisalat Company could lead to customer frustration and losing consumers to their competitors. The services and practices conducted by Etisalat could though be perceived as the satisfactory level but then it is also perceived to be perfect by some section of its customers, more so with regards to call charges. The report hence concludes that, for any Etisalat Company to improve market research, it must be part of its corporate culture. 8.0 References Anand, V. & Rosen, C.C. (2008). The Ethics of Organizational Secrets. Journal of Management Inquiry, 17, 97-143 Chapple, W. & Moon, J. (2005). Corporate social responsibility (CSR) in Asia: a seven-country study of CSR, Business and Society, 44, 415-441 Creswell, J. W. (2008). Educational Research: Planning, Conducting, and Evaluating Quantitative and Qualitative Research. Upper Saddle River, NJ. Pearson Education, Inc. Dawn. (2010). Etisalat may acquire more stakes in PTCL. Retrieved 4th May 2014 from http://www.dawn.com/news/829663/etisalat-may-acquire-more-stakes-in-ptcl DeGeorge, R.T (2010). Business Ethics (7thed), Upper Saddle River, Pearson Education, Inc Etisalat. (2014). Etisalat Official Website. Retrieved 4th May 2014 from http://www.etisalat.com/en/ir/index.jsp Grace, D & Cohen, S. (2005). Business Ethics: Australian Problems and Cases. Oxford University Press. Jacobs, J. (2004). Corporate Governance Reform: What It Means for Associations. Association Management, 56, 17-28. Mohamed, M. (2011). Etisalat officially seals Ahly's Shirt deal. Retrieved 4th May 2014 from http://english.ahram.org.eg/NewsContent/6/51/16140/Sports/Egyptian-Football/Etisalat-officially-seals-Ahlys-Shirt-deal-.aspx Oketch, M.O. (2004). The corporate stake in social cohesion: Corporate Governance, International. Journal of Business in Society, 4, 5-19. Sharbatoghlie, A., Mosleh, M & Shokatian, T. (2013). Exploring trends in the codes of ethics of the Fortune 100 and Global 100 corporations. Journal of Management Development, 4, 327–345 Thompson, B. (2009). UAE Blackberry update was spyware. BBC. Read More

Hence, the information this report analyzes is the extent to which Etisalat is ethically responsible. The aim of the paper is to demonstrate why ethical and corporate social responsibility is important for an organization. 3.0 Literature Review 3.1 Ethical and Social Responsibility Ethics is defined as a collection of principles and concepts which guide humans in recognizing what behavior assist or injure conscious creatures. In the perspective of a company, it is the principles which help the company and stakeholders understand what is good for them and what harms its image (DeGeorge, 2010).

These principles can be either be written or are just made part of the organizational culture which new members of the company can observe on the existing members. The company must integrate ethical practices in its production, marketing, selling, human resource management, workplace conditions and waste management, etc. This is what emerges as the business ethics to which member of the organization subscribes to. On the other hand, corporate responsibility is where the company feels it has a sense of the responsibility towards the environment and society in which it operates.

It is normally incorporated into the business model (Oketch, 2004, p.6). CSR policy works as an integrated, self-regulating process in which a business checks and make sure its activities conform to ethical standards, spirit of the law and global norms (Sharbatoghlie, Mosleh & Shokatian, 2013, p.328). Here, the company participate and try to help in some of the problems that are facing the Society. Based on the literature, this report analyses the extent to which Etisalat is ethically responsible. 3.2 The extent to which Etisalat is ethically responsible Since its inception, Etisalat has grown to several countries and is now operating in Middle East, Asia, and Africa.

With over 150 million customers all over the world, the company has a responsibility to satisfy the needs and wants of its clients. True to that, the company has tried to remain ethical and responsible in its operations. Etisalat (2014) argues that, it has set code of ethics to guide the management and employees to adhere to proper practices which is also viewed by philosopher and the society as morally correct. The company has participated in many initiatives which influence the society positively.

This creates the image that Etisalat not only interested in making profit but also care for the social welfare of the society in which it operates (Jacobs, 2004, p.21). However, like many other big companies Etisalat has failed in some aspect of ethical issues including transparency and confidentiality. According to Etisalat’s website, the company works in line with the core traditions, cultures and the society’s way of life in every market it operates (Etisalat, 2014). Etisalat conforms to the laws and policies being adopted by Ministry of Labor and Social Affairs in AUE.

Therefore, the company code of ethics is well stated. Etisalat’s code of ethics states that it is morally wrong to accept forced labor in their company. It recognizes in right to choice, and its employees are employed in their personal volition to work for the company. According to the company’s Website, Corporate Social Responsibility practiced by Etisalat revolves around health and the environment (Etisalat, 2014). The company is a member and a participant of United Nations Global Compact, an act which has transformed its ideas of CSR, made it to introduce trends such as “Cause based CSR” and other numerous programs in the areas of environment, humanitarian aid, sustainable development and special needs (Etisalat, 2014).

Etisalat is offering clean water in Egypt through its CSR “Origin” initiative. (Etisalat, 2014) The nation-wide initiative is operated in cooperation with international bodies and other development agencies. The company is also usual participant and member of the Arab Corporate Environmental Responsibility Summit.

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