vodafone 10 2 by JWv8eZ


									Vodafone Section 2 printed from The Times 100 website: www.tt100.biz

Developing and implementing a strategic approach to ethics
02_Ethics and business aims
Vodafone has grown rapidly since it was originally formed in 1984. It has responsibilities to its 60,000
staff and 151 million customers and shareholders.

It also believes it has a responsibility to society. The company aims to continue to grow. Economies of
scale improve efficiencies, enhancing the company's performance. This increases returns to shareholders
and makes money available to improve services to
customers. In order to grow, Vodafone must attract new customers and retain those it currently has.
Serving customers well relies on the ability to attract and retain good quality staff. Both these stakeholder
groups care about the company's ethics. Vodafone has carried out extensive research which confirms what
the company believed - operating ethically generates clear benefits. The results showed that customers are
loyal to companies they trust. They also favour companies that operate in a responsible manner.
Vodafone operates in a competitive market; its competitors also want to grow. In order to achieve
competitive advantage, Vodafone must understand its position relative to its competitors. Research below
shows the company's strong position.

Companies' actions are influenced by other stakeholders including pressure groups and government
regulators. A business that did not care about ethics would simply seek to maximise revenues regardless
of how its products affected society. It is unlikely that such a business would continue to grow because,
for example:
• regulators would punish their actions e.g. imposing fines and revoking operating licences
• pressure groups would highlight unethical actions, adversely affecting what customers think.

Ethical companies do the right thing and concern themselves with the long term. This may damage
financial performance in the short term. Ethics guide decisions. When Vodafone first included moderators
into young people's chat rooms to create a safe environment for chat, the number of users dropped
significantly. This led to reduced revenues for the company. However, the company believed that this
was the right thing to do. The growing esteem in which the company is held by the wider public justifies
this approach.

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