Comparative Analysis Of BMW And Ford's CSR: A Meaningful Essay. (70 Characters)

Corporate Social Responsibility is a key activity of corporate practice worldwide.

1. Choose 2 companies each operating in a different country (BMW and Ford)

2. Compare how CSR is practiced in each of the 2 companies in the 2 different countries

Corporate Social Responsibilities: Conceptual Framework

In the contemporary period, with the global corporate scenario becoming more interconnected and with increased awareness and dissemination of information about the commercial activities among the different stakeholders like consumers, investors, employees and societies as a whole, it has been becoming immensely important for the business organizations across the globe to concentrate on their social responsibilities and ethical aspects, along with profitability and revenue generation, in order to stay competitive, relevant and sustainable in the increasingly complex global business framework (Schwartz 2017). This in turn, has resulted in increasing popularity of the term, “Corporate Social Responsibility”.

Keeping this into consideration, the concerned report tries to analyse the framework of corporate social responsibilities which is present in one of the most esteemed and reputed luxury automobile company, the BMW, in their operational framework in Germany. The report also tries to analyse and explore the influence of the governance systems of the concerned country on the CSR related activities and framework of the BMW Company in Germany.

The notion of Corporate Social responsibility, is a wide and multilateral one, in general referring to the self-regulatory activities which are taken into account by different organizations, especially corporate or business organizations, with the intention of operating in an ethical and sustainable framework, thereby not only ensuring economic profitability but also generating higher welfare (both economic and overall) for the different people associated with the organizations, like the employees, the customers, other stakeholders and the society and community as a whole (Tai and Chuang 2014). The primary components of the Corporate Social Responsibility of business organizations, in a generalised framework can be seen to be as follows:

Economic Responsibilities- The primary economic responsibility of any business organisation is that of being profitable, such that it can sustainably cater to the employees (in terms of wages), shareholders (in terms of their share of profits) and governments (in terms of taxes and other financial obligations) (Suliman, Al-Khatib and Thomas 2016).

Legal Responsibilities- The companies need to abide by the laws and regulatory framework in the regions where they operate, in order to maintain their reputation and goodwill.

Ethical Responsibilities- In the contemporary period, to stay sustainable and reputable, it is of immense importance for the companies to operate in an ethical framework and in a righteous manner.

Discretionary Responsibilities- The business organizations need to contribute to the community and the society with the help of their own resources, such that the overall welfare of the society increases (Roy et al. 2015).

Keeping this into consideration, the following section of the report tries to analyse the CSR activities and practices of the concerned company, BMW, in Germany.

The BMW Company, being one of the predominant names in the global luxury automobile industry, has its operations in many countries, but the base and origin of the company is in Germany, with its headquarters in Munich. However, apart from its luxury products and customised services, the company is also known for its actions of incorporating sustainability and corporate social responsibilities in its operations (Bmwgroup.com 2018). From 2001, the concerned company has developed its strategic sustainability and CSR targets, which has been consistently pursued by the company from that point of time. The CSR paradigm and sustainability practices as well as targets of the company can be seen to be as follows:

Corporate Social Responsibility of BMW

Figure 1: CSR and Sustainability Targets of the BMW Company

(Source: Vallaster, Lindgreen and Maon 2012)

The three key areas where the company concentrates in its CSR related activities are as follows:

• Products and services
• Value creation in the production processes
• Employees and the society as a whole (Ganescu 2012)

The Corporate Social Responsibilities which are already taken up by the company can be seen to be as follows:

The concerned company, being an automobile company, acknowledges the environmental degradations which are caused by the production and usage of the automobiles across the globe. Keeping this into account, the company has already started decreasing the level of carbon dioxide emissions in its new vehicle fleets and targets to reduce the same by 50% by 2020, as compared to its base year, 1995 (Bmwgroup.com 2018). The company has already reduced the average fuel consumption of the new cars by 42% since 1994. BMW also aims to reduce the wastage of fuel and excessive consumption of non-renewable fuel resources and for doing the same it deploys company buses for its employees. In total, nearly 15,000 employees of the company take company buses, thereby reducing the number of cars on the roads of Germany, reducing both fuel consumption and emission of carbon dioxide.

BMW, in the contemporary period, has been consistently moving towards electro mobilisation, with launching of electric cars in Germany and also in other European countries. The company has also installed more than 37,000 BMW i-charging points in 29 countries, including Germany. By transporting its cars by rails, the company has avoided 80,000 truck journeys in Germany in 2017 (Bohnsack, Pinkse and Kolk 2014).

The company, being a global employer and influencer in the international commercial scenario, also acknowledges its economic responsibilities towards the different stakeholders, including its employees, investors and suppliers across the globe. The supplier network of the company accounts for nearly 80% of the total value added of the company and in Germany, BMW has a long-term as well as expanding supplier network (Bohnsack, Pinkse and Kolk 2014). The company also offers transparency in their reports and financial as well as other activities, to attract their investors and also maintains long-term relation with them by catering to their interests.

BMW is known for providing an ethical and productive work environment to its employees, comprised of different types of privileges. The company promotes healthy living and work conditions for its employees. In the Munich branch alone, there are 21 bicycle stands with nearly 118 bikes for the employees to commute within the campus, free of cost (Brown 2013). The company also provides facilities like medical insurance, accidental insurance, work-place safety drills and regular health check-up facilities to their workers. In Germany, the company has its own Group health service, where 154 doctors and medical staffs treat thousands of employees. The canteens of the company in Germany, provides 47,000 meals every day and nearly 2.6 million salad servings every year, to promote healthy eating habits.

The company believes in giving back to the community and the society in which they venture. Being a supporter of healthy living, the company arranges for fitness drives, medical check-ups and other welfare increasing activities in Germany. BMW also invests in the educational sector of the country, especially for the under-privileged ones, in order to develop the skills of the future work-force in the country, thereby contributing to the economic and overall welfare of the society (Brown 2013).

Comparison of CSR practices between BMW and Ford

Thus, from the above discussion, it can be asserted that the BMW Company has developed a robust corporate social responsibility framework, especially in its domain of operations in Germany. The CSR activities of the company, however, are influenced by several factors, of which one of the primary one is the policy framework of the government of Germany in this aspect.

Germany is one of those countries which emphasize considerably on the corporate social responsibilities of the companies venturing in the country and on the aspects of the duties which the companies need to acknowledge in order to ensure an overall societal welfare. In 2009, the Labour Ministry of the country, launched the National CSR Forum, which advises the Federal Government of the country, regarding the developments of the national CSR strategic framework (Csr-in-deutschland.de 2018).

The most crucial CSR activities of the governing authorities of Germany include the following:

• Promotion of decent work environment across the globe, through creation of sustainable supply chain
• Abiding by the guiding principles of UN and implementing the same in their National Action Plan for Business and Human Rights
• Implementing the EU Directives in the CSR activities of the companies operating in the country

The primary areas where the government of the country focusses, in terms of CSR activities, are as follows:

• Overall welfare of the employees and workers associated with the operational activities of different companies in the country, in the aspects of standard wage structure, job securities, work environment and health related facilities.
• The improvement of the overall lifestyle of the employees and their family members.
• Educating the business institutions about their responsibilities towards societies, environments and towards the community in which they operate (Verbeeten, Gamerschlag and Möller 2016).
• Imposing stricter environmental regulation on the companies, especially those whose production and operational activities include components of environmental degradation (Brown 2013).
• Protection of human rights.
• Eradication of poverty in the country as a whole.

Conclusion

Keeping into consideration the above discussion, it can be asserted that over the years, the notion of CSR has been increasingly becoming popular and different companies are incorporating the same in their operational framework. The BMW Company, is one of the business organizations known for their activities in this aspect, especially in their domain of operations in Germany. However, much of their operations in Germany are influenced by the governing policies and strategic framework which are present with the government of the country, keeping into consideration the fact that the government of Germany focusses considerably on the aspects of corporate social responsibilities of the businesses and their duties in the aspects of increasing the overall welfare of the society and the community in which they serve and in the aspects of preserving the environment quality for future generations.

References

Bmwgroup.com 2018. SOCIAL COMMITMENT. [online] Bmwgroup.com. Available at: https://www.bmwgroup.com/en/responsibility/corporate-citizenship/social-commitment.html [Accessed 25 Sep. 2018].

Bmwgroup.com 2018. SUSTAINABLE VALUE REPORT. [online] Bmwgroup.com. Available at: https://www.bmwgroup.com/en/responsibility/sustainable-value-report.html [Accessed 25 Sep. 2018].

Bohnsack, R., Pinkse, J. and Kolk, A., 2014. Business models for sustainable technologies: Exploring business model evolution in the case of electric vehicles. Research Policy, 43(2), pp.284-300.

Brown, A., 2013. Quality: where have we come from and what can we expect?. The TQM Journal, 25(6), pp.585-596.

Csr-in-deutschland.de 2018. CSR - CSR Policies in Germany. [online] Csr-in-deutschland.de. Available at: https://www.csr-in-deutschland.de/EN/Policies/CSR-national/CSR-Policies-in-Germany/csr-policies-in-germany.html [Accessed 25 Sep. 2018].

Ganescu, M.C., 2012. Corporate social responsibility, a strategy to create and consolidate sustainable businesses. Theoretical & Applied Economics, 19(11).

Roy, S.K., Roy, S., Mubeen, R., Brindha, N., Abirami, A., Leve, S.L., Mohanraju, B.L., Priyadarshini, K., Jeyabharathy, P., Thilakam, C. and Mahadevi, S., 2015. Corporate social responsibility. EduPedia Publications Pvt. Ltd..

Schwartz, M.S., 2017. Corporate social responsibility. Routledge.

Suliman, A.M., Al-Khatib, H.T. and Thomas, S.E., 2016. Corporate social responsibility. Corporate Social Performance: Reflecting on the Past and Investing in the Future, p.15.

Tai, F.M. and Chuang, S.H., 2014. Corporate social responsibility. Ibusiness, 6(03), p.117.

Vallaster, C., Lindgreen, A. and Maon, F., 2012. Strategically leveraging corporate social responsibility: A corporate branding perspective. California management review, 54(3), pp.34-60.

Verbeeten, F.H., Gamerschlag, R. and Möller, K., 2016. Are CSR disclosures relevant for investors? Empirical evidence from Germany. Management Decision, 54(6), pp.1359-1382.