The Corporate Social Responsibility of the Volkswagen with Respect to Carrolls Pyramid of CSR - Essay Example

CRITICAL ANALYSIS OF THE CORPORATE SOCIAL RESPONSIBILTY Contents Contents 1 1. INTRODUCTION 2 1.1 Aim of the report 2 1.2 The Volkswagen Company 2 1.3Content of the paper 3 2. THEORITICAL AND CONCEPTUAL ANALYSIS 4 2.1 Carroll’s Pyramid of Corporate Social Responsibility 4 2.1.1 Ethical Responsibilities 4 2.1.2 Philanthropic Responsibilities 5 2.1.3 Difference between the Ethical and Philanthropic Responsibilities 5 2.2 Analysis of the perspective of Ethical Responsibilities 6 2.2.1Volkswagen and Climate protection 6 2.2.2 Critical evaluation 8 2.2.3 What society expects 8 2.2.4 What the corporation is doing 9 2.3 Analysis from the perspective of philanthropic responsibilities 9 2.3.1 The Volkswagen’s Sound Foundation 9 2.3.2 Critical evaluation 10 2.3.3 What society would like 11 2.3.4 What the corporation is doing 11 3. 0 CONCLUSIONS 11 3.0.1Recommendations 13 4.0 Bibliography 14 1. INTRODUCTION 1.1 Aim of the report Traditionally, the Corporate Social Responsibility requires that a company give active contribution to social welfare and charitable measures. Such activities encompass a wide range of measures, which include corporate volunteering, societal donations, as well as community development. Though these contributions are not mandatory, it is the voluntary service of each company to ensure that these offers are considered, in a bid to explain the core purpose of social responsibility (Blowfield & Murray, 2011). In the current international field of business, corporate social responsibility constitutes an integral part of the value of competency that a firm acquires. Each company, therefore, has the obligation to orient the corporate social responsibility in their strategic goals and their operational mandate. This concept encompasses how funds are used, how the company generates those funds before relating these concepts to the ecological and social standards of the company’s production environment, its supply chain and the impact on the product itself. As a result, this report aims to highlight the corporate social responsibility of The Volkswagen Car Company, with respect to Carroll’s pyramid of Corporate Social Responsibility. 1.2 The Volkswagen Company In the German Automotive Industry, Volkswagen boasts of being the all time high sales record holder. Volkswagen, being a multinational plant owner of car assembly and manufacture, interprets sustainable business as more than just making profits. The company emphasizes on the need for healthy competition in the process of doing business while also assuring healthy dialogue with the environment and the society. The self-interest of this company lies in the desire to be recognized by the society as an entity that generates value. In the management board of this giant company, diversity is evident. In accordance with the performance of the management, the company believes that holding onto the leadership role in several international markets requires massive responsibility. It is with these responsibilities that Volkswagen builds opportunities. The greatest opportunity of the company comes when both the social and political groups entrust the company with the increasing responsibility levels. With exception, Volkswagen takes the responsibility of business attitude with the seriousness it deserves. These levels of seriousness determine the influence that the company has on the social, ecological and economic conditions of people living round the company’s global plants. The sustainability of the company’s globalization track requires it to distribute roles and model appropriate codes of conduct. Corporate Social Responsibility, as depicted by Volkswagen, is a philosophical mandate in the management of the business. Contrary to Volkswagen, other companies use CSR as a window-dressing to the main activities of the business. In this case, the role of CSR changes from that of being social into being business. The degree or the extent to which the companies view CSR may differ, but the greater facet is the need for all companies to practice CSR as conceptual umbrella of their operations. This enables businesses to foster sustainable development, and push for the social harmonizers in unity, equality, and non-discrimination. 1.3Content of the paper This paper aims to outline two theoretical arguments that relate to Corporate Responsibility Social as envisaged in Carroll’s pyramid of Corporate Social Responsibility. These theories, the Ethical Responsibilities and the Philanthropic Responsibilities, will determine the validity of the CSR as undertaken by Volkswagen. The theoretical and conceptual frameworks will distinguish the application of these theories in the explanation of CSR in the company. Furthermore, this paper will issue recommendations concerning the general need for Corporate Social Responsibility, clearly stating situations under which the impact CSR is evident. 2. THEORITICAL AND CONCEPTUAL ANALYSIS 2.1 Carroll’s Pyramid of Corporate Social Responsibility This CSR masterpiece sets to explain the role of CSR in the contentious business environment. This theory focuses on a wide range of responsibilities that concern the operation of a business, and embraces these responsibilities. According to Carroll, the social responsibilities of businesses constitute the ethical, philanthropic, legal, and economic responsibilities. These components or categories qualify the depiction of a pyramid. The reality according to this pyramid is that all these responsibilities exist in the business setting. The difference is just the extent to which they exist. In the past few years, the ethical and philanthropic roles have grown significantly, despite the fact that all the four categories involve the social responsibility of business. 2.1.1 Ethical Responsibilities The legal and economic responsibilities constitute ethics, but to a smaller extent as the core ethical responsibilities. These responsibilities envisage all the other practices and activities that are either prohibited or expected by the members of a society despite these responsibilities not being included in the law. The society embodies shareholders, the community, the employees, consumers, and the government. These responsibilities frequently precede the making of laws such as the civil rights, the environmental conservation laws, and the consumer protection rights. 2.1.2 Philanthropic Responsibilities These corporate actions respond to the expectations of the society towards the need for businesses to be good corporate citizens. To expound further on the social expectations, certain indications imply a company’s engagement in philanthropic activities. These activities include engaging in programs and acts that promote and elevate the spirit of goodwill and humanity (Burchell, 2008). The business for example, may contribute to finance some societal resources including education, arts, and community health centers. 2.1.3 Difference between the Ethical and Philanthropic Responsibilities Evidently, the main difference between these two responsibilities is the expectations of ethics and morality. The philanthropic responsibilities do not concern any levels of ethics or moral sense. The communities look forward to contributions by firms into building humanitarian programs. The communities, however, do not regard companies that do not provide to the desired level of contribution as unethical. Essentially, philanthropy depends on the voluntary and discretionary option on the businesses’ part. Normally, organizations feel that they are socially responsible if they are good citizens of a particular community. This distinction is vital in differentiating the ethical and philanthropic responsibilities of the organization. It proves that the CSR is not limited to philanthropic contributions, but on the need for businesses to exercise caution when contributing to community projects. Nevertheless, philanthropy represents the highly most desired responsibility according to the four pillars of the Carroll’s Pyramid of Corporate Social Responsibility (Carroll, 1991). 2.2 Analysis of the perspective of Ethical Responsibilities Ethical responsibilities demand that the company performs in a manner that is consistent and in line with the societal expectations considering the ethical norms. Besides, according to this perspective, it is fundamental to respect and recognize the evolving or new ethical morals that a society adopts. The companies should strive to prevent the compromise of the ethical norms just for the sake of the achievement of the corporate goals. Furthermore, the companies should know the importance attached to the good corporate citizenship, and use this knowledge to do what is socially ethical and moral. The perspectives of these social responsibilities require that organizations identify the role of ethical behavior and corporate integrity. This goes a long way in explaining ethical responsibility as more than mere compliance with the state regulations and laws. These perspectives shape how the social responsibility of c company influences the society around the company. 2.2.1Volkswagen and Climate protection One of the major confines of ethical responsibilities that Volkswagen undertakes is the protection of the climate. With the current increase in the number of industries internationally, global warming poses a challenge to the comfort of human beings. As part of the ethical responsibility, Volkswagen undertakes various exercises that aim at sensitizing the community on the need for environmental preservation and protection of the climate from further alterations. The German Nature and Biodiversity Conservation Union (NABU) collaborated with Volkswagen to develop national and regional structures that conserve nature. In the past several years, NABU and VW have put in place large number of training sessions that aim to teach more about the need for fuel saving throughout the country. The main theme of this program challenges citizens to look into the future and evaluate the impacts of less driving on the climate and environment. To capture the attention of citizens, the company organizes free fuel for the trainees, to help them realize the driving less could save money for them as well. The company, since the year 1996, organizes competitions that regard the saving of fuel. These competitions, called the “German Fuel Saving Championships” ensure that the society gains education concerning the effects of excessive fuel consumption on the climatic conditions. Together with the AutoBild Magazine, this championship incorporates other corporate figures like Deutsche Veedol and the German National Association of Motor Traders. This campaign goes beyond the need for improving car sales, instead focusing on the reality of the damage that pollution causes on the environment. The “Try and See” fuel saving training sessions are conducted free in major cities and towns across Germany. This program is available during national church days, and is offered to the attendees of churches, in collaboration with NABU. In addition to these free services, the company organizes free car training sessions to people who have the agenda of safety and saving. 2.2.2 Critical evaluation The operations of the company to boost environmental conservation are evident. Through environmental conservation, the company ensures that the effects of heavy industrial activity do not affect the society (Frazer and Rogers, 2010). The collaboration with NABU explains the recognition the company owes to the evolving changes in the climatic conditions. It is important for the companies to respect the roles of each norm that the society adopts. Therefore, VW shoes commitment by joining with NABU to spread the need for environmental conservation. The free services the company offers in the process of campaigning for the climate protection indicate the levels of seriousness that VW take in protecting the ethical norms. By compromising the company’s corporate goals of profit making, these training sessions act as incentives to determine the cooperate citizenship of VW. Moreover, the consistency that the company displays since the year 1996 meets the societal expectations and erases all the doubt to the commitments of the company in improving lives (Zu, 2009). Social responsibility is about the kind and fair actions that an organization partakes in relation to the society. As the illustrations depict, VW brings solutions to the community as part of the global campaigns that aim to solve the problems of humanity. However, the collaboration with the government may be judged as a plan to blackmail the efforts to reduce the industrial activities of companies that produce heavy machinery and consume enormous amounts of fuel. 2.2.3 What society expects Primarily, the prospects of the society are included in this project. The society expects the company to champion for the right ethical practices. The dynamic interplay between the expectations of the society and the actions of the company explain the principles of moral philosophy. It would be sarcastic for a big company to organize fuel saving competitions and demand payment for the issuance of such services. Similarly, it would be wrong morally to increase the prices of cars by a certain percentage to cater for the costs incurred in setting up structures of climate control (Hunnicutt, 2009). Consequently, the company fulfills the needs of the population in line with protection of the environmental prestige. 2.2.4 What the corporation is doing The company is increasing the rewards for each free competition every year. Despite this, the prices of the cars are constant and move depending on the market conditions, not on the influence from the society. Besides, the company maintains integrity by respecting the court orders and complying with the country’s regulatory requirements. 2.3 Analysis from the perspective of philanthropic responsibilities These responsibilities require the company to be charitable and assist in performing and fine arts. These activities are voluntary and should apply to both the management and employees. The company should provide direct financial assistance to community projects (Carroll, 2008), in both public and private industries. These projects, furthermore, should focus on the improvement of quality of life of a community. 2.3.1 The Volkswagen’s Sound Foundation VW set up the Sound Foundation several years ago to cater for the need to tap into the unrealized German talent. Since its formation, the foundation has sponsored and assisted over 1,000 upcoming bands in Germany. These efforts led to the Company receiving the International Sponsoring Award in the year 1999 as an appreciation for their activities. The company also sponsors The Donots, a punk rock band that graduated from the company’s Sound Foundation, and songwriter Ingo Knollmann. The company recently secured a sponsorship deal with the local football club Wolfsburg, which plays in the topmost competitive tier of the German football league. In addition to that, the company hosts the Moviementos International Dance Festival every year at their plant in Wolfsburg. This is not a typical conference, as it encompasses the presentation of cultural choreography from all over the world. The company is a principal partner in the Berlin based International Film festival. Besides, the Company sponsors the Talent Campus, which is a network of young filmmakers from different countries around the world. The winner of the sound designing competition, for instance, gets a chance to travel to Los Angeles to the Dolby Sound Studios (Cragg, Schwartz & Weitzner, 2009). 2.3.2 Critical evaluation VW’s participation in philanthropic responsibilities is overwhelming. Seemingly, the company was amongst the first to venture into philanthropic responsibilities as its tasks span over more than one field. Nonetheless, the choice of the company to sponsor several activities explains the urge of the company to fit into the society’s perspective of philanthropy (Matten & Crane, 2007). Carroll’s pyramid of CSR, particularly the philanthropic responsibility, requires the voluntary involvement of the company in assisting both fine and performing arts. Some activities that the company undertakes on annual basis illustrate the consistency of the company to improve the quality of life of many people. The Sound Foundation offers opportunities for people to grow their talent, and the company takes it further by offering full sponsorship for the best performers in these competitions. 2.3.3 What society would like The society’s expectations are fully catered for by the philanthropic nature of the company. The company has built hospitals that offer free medical services to the staff, schools that their children attend as well as company quarters that house the staff. In addition to the above privileges, the society would prefer if the company gave the community a chance to improve their lifestyles (Beske, Koplin & Seuring, 2008). 2.3.4 What the corporation is doing The company is building more infrastructures in Germany to help improve the quality of people’s lives. Besides, the participation in international and national exhibitions explains the commitment that the company has in fulfilling the expectations of the society towards the philanthropy of the company (Jaccard, 2013). 3. 0 CONCLUSIONS The above arguments depict the relevance of a company’s CSR to the responsibilities enshrined in Carroll’s Pyramid of Corporate Social Responsibility. The findings from the ethical responsibilities indicate the VW performs the social responsibility with diligence. This trend often draws admiration from different quarters of the consumer segment. Similarly, the participation of the company in sensitization of the public explains the need for other companies to adopt a similar strategy (Baker, Baker & Nofsinger, 2012). On the other hand, the philanthropic responsibilities of a company determine how charitable company is. VW for example, sponsors multiple events and talent shows that cultivate talent and encourage the growth of stars. In addition to that, the company builds schools, hospitals and other facilities that make the lives of communities more comfortable and affordable. The above views concerning CSR explain their complementary relationships towards each other. Both the philanthropic and ethical responsibilities require an organization to allocate funds that will oversee the implementation of the responsibilities. It is difficult from that point of view to establish the difference between the two perspectives, because in both situations, the beneficiary is the society. However, the main aim of CSR is to ensure that people live comfortably, while improving the mutual trust with the company. In addition to that, these responsibilities are compatible with the principles of the company. Their compatibility plays a major role in rolling out the projects to address specific regional and local issues. These arguments demonstrate the respect for diversity; hence indicate the existence of diversity within the official framework of the company. The above projects imply to the need for healthy dialogue between the company and the local community because these projects suit the interests of various people in the society. To boost the CSR of the success of the company, VW exchanges information and idea across the diverse management whose expectations and demands often affect the operations of the company. Moreover, the flow of knowledge within the company enables it to determine the impact of their CSR on the society. Primarily, the value chain of the company includes the changes that their CSR has made to the ecological, social and economic status of the society. 3.0.1Recommendations The managements of each organisation should decide which stakeholders receive consideration and merit to be decision makers in that organisation (Janssen, 2013). This goes a long way in bringing the much-needed diversity that is necessary in identifying what the community desire from the corporation. The companies should struggle to recognise the importance of CSR in the success of its operations. Without analysis on the CSR, many companies fail to perform well in international and local markets. In addition to that, the management should begin by showing the right examples in the workplace to instigate such characters as philanthropy and kindness. In conclusion, the morality of a corporation depends largely on the societal view than on the financial gain. Each organization should learn how to uphold ethics, morality and justice in executing their operations. 4.0 Bibliography Baker, H., Baker, H. and Nofsinger, J. 2012. Socially responsible finance and investing. Hoboken, N.J.: John Wiley & Sons. Beske, P., Koplin, J. and Seuring, S. 2008. The use of environmental and social standards by German first-tier suppliers of the Volkswagen AG. Corporate Social Responsibility and Environmental Management, 15(2), pp.63-75. Blowfield, M. and Murray, A. 2011. Corporate responsibility. Oxford: Oxford University Press. Burchell, J. 2008. The corporate social responsibility reader. Milton Park, Abingdon, Oxon: Routledge. Carroll, A. 1991. The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders. 4th ed. Business horizons: Elsevier. Carroll, A. 2008. The Pyramid of Corporate Social Responsibility. London: Routledge. Cragg, W., Schwartz, M. and Weitzner, D. 2009. Corporate social responsibility. Farnham, England: Ashgate. Crane, A. 2008. The Oxford handbook of corporate social responsibility. Oxford: Oxford University Press. Frazer, E. and Rogers, R. 2010. Our Ethical Responsibilities. Air Medical Journal, 29(4), pp.133-135. Hunnicutt, S. 2009. Corporate social responsibility. Detroit, MI: Greenhaven Press. Jaccard, M. 2013. The objective is quality. Boca Raton, Fla. : London: EFPL ; Taylor & Francis [distributor]. Janssen, C. 2013. Corporate Historical Responsibility (CHR): Addressing a Corporate Past of Forced Labor at Volkswagen. Journal of Applied Communication Research, 41(1), pp.64-83. Matten, D. and Crane, A. 2007. Corporate Social Responsibility. London: Sage Publications ltd. Zu, L. 2009. Corporate social responsibility, corporate restructuring and firm's performance. Berlin: Springer. Read More