A2 Business Studies External Influences – Unit 6 Developing and implementing a strategic approach to ethics: Vodafone 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. 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. 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. Ethics, strategy and values Vodafone takes a strategic approach to its ethics and business decisions. This involves managers considering the impact of important decisions in the long-term. Goals are discussed and then agreed. Vodafone has six global goals. One of these is 'to be a responsible business'. This includes the issues of ethics. Companies develop strategies to meet their goals. Vodafone has eight key Corporate Social Responsibility (CSR) strategies. These form part of the companies approach to meeting its global goal of being a responsible business. One of these is responsible marketing: an example would be the company's decision not to send bulk unsolicited (i.e. un-requested) emails or SMS messages to its customers, they have to choose to opt- in to receive communications. Vodafone's employees implement company strategies in a fast changing competitive environment. They have to make effective tactical decisions. To do this they need a consistent and shared set of values. The company's values are driven by its four passions. Customers, People, Results and The World around the company. Vodafone's staff are empowered and ethical. They share these passions. This helps them make better decisions when reacting to changes. Ethics guide companies in reacting to changes in the environment. The following sections provide some examples of each factor, which are relevant to Vodafone. Social factors Society is concerned about under 18s being at risk. Parents may have concerns about their children being contacted (using mobile phones) by paedophiles or other adults. Society is also concerned about adult content being available via mobile phones to under 18s. Adult content includes gambling, violent games, erotic material etc. Further issues related to 'social' include the rise of mobile phone theft. The advent of 3rd generation (3G) mobile phone technolgy allows Vodafone (and other suppliers) to offer a wide variety of content to mobile phones thus increasing their sales revenues. Vodafone was the first company in the UK to introduce a network bar that effectively blocks access to all forms of content that has been rated as 18. A2 Business Studies External Influences – Unit 6 Legal factors Some laws regulate all businesses e.g. The Sale of Goods Act 1974 stating all products must be fit for the purpose they are intended. A mobile phone must therefore work. Certain laws are created to regulate particular industries. Examples include the ban on using holding a phone while driving introduced in 2003. Independent industry regulatory body: OFCOM - the Office of Communications. OFCOM is the independent body for regulating the communication industry - www.ofcom.org.uk. Vodafone goes beyond government regulation, working with its competitors in self-regulation. However to retain its leading position in the industry Vodafone believes it must exceed both legal regulations and industry self-regulation. Economic factors The state of the economy, for example levels of growth can impact companies. Companies' activities also contribute to the overall economy. Companies should remain true to their ethical values. If they do not, customers may question the company's beliefs. Political factors Government policy indicates that it wants the mobile phone industry to create self-regulating controls in relation to content. The government also shares public concern about unwanted contact and content. Technological factors The use of mobile phones has changed due to developments in technology. Mobile phones were originally used for telephone conversations, then Text messaging and now it has become possible to swap information between mobiles and other devices via Bluetooth technology. This can be used inappropriately to send anonymous and unwanted texts. This practice is known as Bluejacking and can be distressing particularly if the recipient is a child or young person. Ethical responses Vodafone's ethical approach drives its response to changes in the environment. Vodafone seeks to reduce spam text messages by locating their source. Vodafone also watches network traffic for the sources of unwanted messages. The efforts in this area have led to a very significant fall in customer complaints. In the UK Vodafone works in partnership with the government, police and others in the industry to help combat mobile phone crime. It also advises customers and the broader community on how to protect their phones and prevent fraudulent use. Actions taken include setting up a register of equipment to block stolen phones. Conclusion Vodafone is a leading player in this market and has grown quickly, like the industry itself. Such a growth presents challenges and the company's approach to ethics guides its continued growth. Ethics are central to the company's development.
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