BMW's Corporate Social Responsibility - Case Study Example

Corporate social responsibility for BMW-AG Overview of corporate social responsibility The modern business environment is consumer driven in many aspects. One of them that have gained prominence is corporate social responsibility (CSR). For communities that support marketers by providing labour and buying their products and services, it is only fair and ethically expected that such corporations should give something in return to the community at the social level. Barth and Wolf 2009, 4-5 say that the various instruments of CSR give rise to numerous definitions. To understand, CSR better, it is better to know the concepts involved which include “corporate sustainability, corporate citizenship, corporate accountability, corporate social performance, corporate social responsiveness, corporate responsibility and corporate governance” (Barth and Wolf 2009, 4). This paper will discuss how BMW has faired in its CSR. Case for BMW BMW AG is a German based automobile manufacturing company with a global presence. The firm manufactures and markets vehicles and motorcycles and their accessories. The company has plants in a number of countries around the world South Africa being one of them. As a responsible global citizen the carmakers is involved in CSR projects in various counties. In South Africa, the firm’s CSR projects revolve around HIV education and awareness campaigns, education for the disadvantaged in the society, green energy and sponsorship of sports and other social events such as arts. In South Africa in particular, Seabrook (2011) notes that the company’s CSR strives “to reaffirm people's sense of worth and dignity, developing individual potential and building capacity, and enabling people to take responsibility for themselves. The company believes in investing in ways to help communities help themselves as well as other needy communities elsewhere in South Africa” (¶). In the UK and Germany, precedence is given to green production. BMW has made positive steps in green technology. It is important to closely assess how the corporation is performing on this front as there are no universal benchmarks for green technology. Basu and Palazzo (2009) and Rondinelli (2006) say some concepts and practices of green technology and manufacturing are not really green. Basu and Palazo (2009) call it ‘greenwashing’ and define it as the erroneous display of some activities as “green” but are not essentially green. One ways that automakers and other manufacturers around the world have gone green is reducing emissions. For players in the auto-manufacturing industry, emissions reduction can be effected in two main directions; reducing emissions in their business processes and also reducing the emissions and fuel efficiency of their vehicles. BMW has performed tremendously well in reducing emissions in manufacturing processes. In the UK, the company has developed a comprehensive sustainability program and waste management program. This applies to all its seven business locations in the country (Sustainability in the UK 2011). BMW is heavily involved in the global war against HIV AIDS. In South Africa in particular, the organization sponsors HIV awareness and education programs, distributes condoms and is also involved in eradicating STD’s. Among its employees, there are several trained peer educators who educate and inform their fellow employees and other members of the society about the pandemic. BMW’s employees are also encouraged to participate in voluntary testing and counselling which is a crucial step in the fight against the disease. For employees living positively, the company has a special health program for them aimed at improving their quality of life and also prolong it. Cornerstones of this programme are clinics in all BMW facilities. The clinics provide health advice to those already infected and offers them health information and dietary assistance. During the 2010 world cup in South Africa, BMW was one of the key financiers of the SABCOHA school holiday camps. These were camps put in place given that the schools would be on an extended break to give way to the world cup. In these camps named Camp I am, children aged between six and thirteen were involved in learning, sports and HIV education and awareness. In launching the program, the Group Chairman and CEO Dr. Norbert Reithofer said that “By pledging our support for the programme we are ensuring that our youth have safe and secure venues to attend during the five week period of the tournament and will learn, along with many other skills, how to combat HIV and AIDS at the same time” (SABCOHA 2011, ¶). The CEO also pointed out a very critical issue in the field of CSR. He said that “Our Corporate Social Responsibility programme is not focussed on marketing or brand building but on the sustainable upliftment of communities” (SABCOHA 2011, ¶). This is a very critical issue that other corporations should emulate because majority of them tend to give back to their core markets and not humanity at large. To uplift the lives of people, BMW sponsors education for the disadvantaged. BMW is a committed partner globally in education matters more so in its core markets. In South Africa, the company sponsors a number of schools in Midrand, Soweto, Rosslyn and Western Cape. The company is also the chief financier of the MST Excellence project that gives precedence to teaching mathematics and science. This project utilises mobile laboratories to reach far flung and remote areas. The idea behind this project is to dispel the fear and myth surrounding mathematics and sciences among primary school students. Again, the project aims to instil a reading culture in young children who are viewed as the future drivers of the global economy. Safety is a sensitive issue in the automobile industry. BMW has showed its commitment towards ensuring the well being of humanity and not its customers only. In China, the company recently finalised a four year program that involved training young children on road safety through the Children’s Safety Education Program. The program aimed at cultivating traffic awareness and self protection in young children. The program saw the development of a traffic safety theme park for children 4-6 years old. The theme park served both as a recreational and entertainment place and also as a learning centre for the young kids. The programme was a response to the high number of traffic accidents in China. The program used high technology and simulations in helping children acquire life skills and knowledge on road use and safety. The children were specifically trained on using zebra crossing and recognising some basic road signs especially those meant for pedestrians (BMW brilliance 2008). Case against BMW China and South Africa are some of the countries hosting BMW’s subsidiary firms and also major recipients of the firms CSR funding and initiatives. South Africa, being located in the sub-Saharan region is not the poorest and the neediest country in the region. This gives an impression that the company is only ready to give back to communities that form its niche market. Neighbouring countries such as Namibia, Swaziland and Zimbabwe receive minimal to nil BMW sponsored CSR projects. Though the management of the company claims to cater for the entire humanity through its projects, it is apparent that countries that do not have the privilege of hosting a subsidiary have very low chances of benefitting from the company’s CSR projects. This however, does not mean that BMW as a brand does not exist in these countries. Randonelli (2006) says that CSR has been globalised. He indicates that multination corporations have moved beyond their markets to embrace the whole world in supporting humanity. On the contrary, BMW has lagged behind in adapting a globalised CSR strategy. A globalised CSR strategy in most cases pertains to environmental protection which is further strengthened and supported by environmental laws around the world. In the UK, BMW is largely involved in environmental conservation while in Australia, participation is minimal. Majority of these developed requirements require social assistance in other areas besides sports sponsorship and environmental conservation to touch on issues closer to communities such as drug use rehabilitation programs and centres. Traffic safety programs such as the one held in China should be established elsewhere as they tend to be more specific and suited to the automotive industry. Fuel efficiency and reduction in emissions has been one of the most controversial issues in the auto-manufacturing industry. Stamoulakis and Bridwel discuss at length BMW’s CSR. They note the company has been on the wrong side of the aspirations of the auto-manufacturing industry in reducing emissions from their vehicles and also improving on fuel efficiency. In 2007, the European Commission proposed to lower CO2 emissions from cars to 120grams per kilometre in 2012. Fines would be imposed on defaulters by 2015 at 95 Euros per gram per kilometre. BMW claims that this policy is not compatible with the company’s policy since t manufactures cars with powerful engines and higher emission levels. The company characterised these measures as naïve and that the measure would favour small car manufacturers such as Fiat and Peugeot. The move would also allow American and Japanese automakers a more global market share. The company has cited many faults in the EU demands arguing that there are many areas through which the world can practice green living besides placing an upper limit on carbon emission on vehicles. The company says that this move is counterproductive to the growth of global economies and hence undermines the fight against climate change. One of the ways that the company has proposed to the EC is to allow the company to attain its carbon emissions plans through other means other than vehicle emission. This brings into focus the carbon trade program which allows firms and countries to but carbon prints by sponsoring green initiatives elsewhere in the world away from their business processes. Some climate specialists such as Professor Bjorn Lomborg argue that drastic cuts in emissions without the right technology will be more costly than the status quo. He argue that the climate change problem should he handled in a period of 50-100 years since the problem of climate change has accumulated over a very long period of time. BMW shares this opinion in calling for more time to allow technology to catch up with such requirements (Stamoulakis and Bridwel). While biofuels give even lower emissions, their efficiency remains relatively lower and the cost of production prohibitive. References Basu, K. & Palazzo, G. (2008). “Corporate social responsibility: a process model of sensemaking” Academy of management review. 33(1), 122-136 BMW 2011. BMW South Africa’s Maths, Science and Technology project sees 2010 matrics flying high http://www.autoworld.co.za/NewsArticle.aspx?Article=9145 BMW Brilliance: Safely Across the Zebra: 100 Thousand Children Benefit from Traffic Safety Education via Interactive Games - 2008 BMW Children’s Traffic Safety Education Program Successfully Concluded in Beijing. http://www.bmw-brilliance.cn/cn/en/news_con_20081113.html Corporate Social Responsibility: Concept and current Overview in Automotive Industry Within Europe, America and Asia. http://www.munich-business-school.de/intercultural/index.php/Corporate_Social_Responsibility:_Concept_and_current_Overview_in_Automotive_Industry_Within_Europe,_America_and_Asia Randonelli, D. (2006). Globalisation of sustainable development?: principles and practices in transnational corporations. http://www.ciber.gatech.edu/workingpaper/colloquium/rondinelli.pdf Sabocoha. BMW South Africa supports SABCOHA School Holiday Camp Programme during 2010 FIFA Football World Cup. http://www.sabcoha.org/press-releases/bmw-south-africa-supports-sabcoha-school-holiday-camp-programme-during-2010-fifa-football-world.html Stamoulakis, D. & Bridwel, L. Bmw’s approach to global warming and environmental management: corporate social responsibility or greenwashing Seabrook, 2011. BMW sports. http://bmwsport.net/content/view/199/91/ Sustainability in the UK. http://www.bmw.co.uk/bmwuk/about/corp/sustainability/0,,1364___,00.html Read More