Vodafone and ethics by nuhman10


									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.

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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