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Assignment Report on Business Value Assessment
Introduction
Modern businesses have a responsibility to the society and they achieve this through the corporate social responsibility (CSR) programs. CSR is the business’ implemented programs or policies to improve the society by implementing environmentally-friendly policies or initiating other programs that address diverse social issues such as education, economic empowerment, safety, and eradicating poverty among other. Apparently, each organization has the mandate to improve the society by undertaking CSR program as well as aligning its corporate objectives, strategies, policies, activities, and values on the betterment of society. This report examines BMW and Suzuki Maruti automobile companies and explores their corporate values, corporate social responsibility in relation to the Sustainable Development Goals advocated by the United Nations (UN).
Company Description
BMW Group
The Bavarian Motor Works (BMW) is a Germany automobile manufacturing company based in Munich specializing in motor vehicles, motorcycles, and engine manufacturing. The company has over 129,000 employees and over 2.4 million automobiles running in the roads around the world with major brands being BMW, MINI and Rolls-Royce Motor Cars and over 164, 153 motorcycles (BMW Group, 2018b). Founded in 1916, the company embraces five core values that are inherent in its culture and drives its corporate strategy. Additionally, these values are critical in promoting a unique team spirit while facilitating the achievement of its CSR objectives. These core values are responsibility, appreciation, transparency, trust, and openness (BMW Group, 2018a). Indeed, BMW has a comprehensive social responsibility program under the social commitment platform. The company engaged in a range of activities that seek to promote interculturality and innovation, contributing to social mobility and inclusion, experiencing mobility and sustainability, inspiring the next generation of engineers, teaching road safety, as well as taking responsibility for society and the environment (BMW Group, 2018c). The BMW group has 30 productions in 14 countries around the world and its CSR programs are country specific.
Suzuki Maruti
The Suzuki Maruti is an Indian automobile company established in the early 1980s with its first care the Maruti 800 launched in 1983. Today, the company has manufactured and sold over 20 million cars around the globe with the main brands being Suzuki Escudo, Ignis, Alto, Baleno, and S-cross among others (Maruti Suzuki, 2019b). The company has strong corporate values that have guided its success over the last three decades which are responsible, dynamism, openness, efficiency, and reliability. In its attempt to be a people’s company, Maruti Suzuki has established strong corporate social responsibility programs to address social issues at the local and international levels. The Maruti Suzuki CSR programs have a specified approach and priority that focuses on village or community development, road safety and skill development. Notably, the community development aspect seeks to improve different social issues including health, education, as well as water and sanitation (Maruti Suzuki, 2019b). On the skill development aspects, Maruti’s CSR programs seek to upgrade government vocational and technical training institutes as well as enhance skills in the automobile trade. Finally, the road safety program focuses on driving training and road safety education.
Cooperate Social Responsibility Report
The corporate social responsibility agenda for the BMW group has sustainability at its centre. The firm states that it has a “long-term thinking and responsible action” as the basis of its economic success. In this aspect, it embraces ecological and social sustainability as well as product responsibility and resource conservation in its corporate strategy. The company focuses on reducing fuel consumption and carbon emissions as part of its sustainability agenda. Apparently, these values are inherent in its CSR programs (BMW Group, 2018c). On the other hand, Maruti Suzuki’s corporate responsibility is not self-driven but guided by the government law especially section 135 of the Companies Law 2013 (Maruti Suzuki, 2019a). Although the company implements its social responsibility as a compulsory requirement, it focuses on strategic social issues that affect the community especially relating to the automobile industry.
The two companies have similar CSR themes which include road safety, supporting education n training as well as proving other social amenities. Regardless, their presentation is very different in terms of depth of description and illustration of the programs in practice. In particular, in their CSR program about education, Maruti Suzuki provides vague and general information that leaves the reader wondering about the tangible impact of the initiative. In its report, the organization explains its partnership with the local community and government education department to improve government school and provide scholarships for orphan children. In contrast, the BMW group’s CSR program on education falls under the social mobility and inclusion spectrum (BMW Group, 2018c). In their description of social commitment to education, the BMW describes the type of education they support which is mathematics, IT, natural sciences and technology (MINT subjects) and illustrates their partners, area of operation, with images to confirm the results.
Another theme that deserves comparison is the road safety initiative for both companies. Apparently, both Maruti Suzuki and BMW are concerned with road safety being automobile manufacturers. Notably, both organizations focus on two major areas which are road safety education and driving training. On the one hand, Maruti Suzuki dedicates most of its time on driving training with a major focus on the youths and women (Maruti Suzuki, 2019a). This includes enhancing their driving skills, knowledge of traffic rules as well as health and safety. Additionally, the company invest in facility and infrastructure development to improve the quality and reduce the cost of training. On road safety education, Maruti Suzuki uses the media to broadcast specific road safety awareness programmes (Maruti Suzuki, 2019a).
The BMW group has different road safety training programs in different countries including Malaysia, China, and Russia (BMW Group, 2018c). The company uses workshops and collaboration with local organizations to teach people of different age groups including children, teens, and adults as well as drivers on how to behave when on the road. The firm also uses modern technologies such as mobile application to reach youths. Unlike the Maruti Suzuki programme, the BMW programme addresses many active and passive issues related to road safety. The company partners with BMW Group Italia, BMW Foundation de France, Global Indian International School (GIIS), Infrastructure Leasing & Financial Services Limited, Ukids in Malaysia, Experimentanium Museum Moscow in Russia as well as BBA (BMW Brilliance) in China (BMW Group, 2018c).
Sustainable Development Goals Relevant to the Organizations Business
The United Nations developed 17 goals to transform the world by 2030. These goals seek to address various social issues affecting human society such as poverty, illiteracy, hunger, healthcare, and clean water (United Nations, 2018). In the development and implementation of their social responsibility programmes, organizations must consider social issues that need redress in their country and industry. For BMW and Maruti Suzuki, the main sustainable development goals that influence their CSR operations include education, water and sanitation, build resilient infrastructure, promote sustainable industrialization and foster innovation, make cities safe and sustainable, as well as combat climate change and its impacts.
In improving education, the BMW group has established a program that provides scholarships for students from poor families in countries that experience economic challenges such as Brazil. The company believes that all children should have access to proper education; thus, it promotes MINT subjects in countries with limited access to education. On a similar account of education, the company inspires the next generation of engineers to ensure its sustainability by providing MINT students with opportunities to learn both theoretical and practical knowledge. Some of the scholarships provided by the BMW group include 25 scholarships for students in Mexico to complete engineering course (BMW Group, 2018c). In the United States of America, BMW provides scholarships and internships to university students to improve their experience in the real world. Maruti Suzuki also provides scholarships to students from poor backgrounds whose parents died from road accidents. In addition, it promotes learning institutions with facilities and infrastructure development to improve the quality of education.
In the UN Sustainable Development Goals, access to water and sanitation is a critical agenda. This goal aims at ensuring that all people around the world have adequate access to fresh water to address food security and diseases. Indeed, both the BMW group and Maruti Suzuki have appropriate CSR programs addressing water scarcity which is an issue of concern in India (Sathaye, J., Shukla, P. R., & Ravindranath, 2006). The BMW Group through the Care 4 Water program provides clean and fresh water to over 320 families in Thailand. The program was initiated in 2016 in collaboration with BMW Financial Services and Waves for Water. Other beneficiaries of this program include South Africa, Mexico, and Brazil (BMW Group, 2018c). On the other hand, Maruti Suzuki has a water and sanitation programme under the community development agenda. The programme seeks to provide clean water as well as solid and liquid waste management facilities in an effort to improve the health of the community. The firm achieves this by upgrading the available facilities and constructing domestic toilets for the poor families in India.
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Quality of the Social Accounting Approach
The quality of reporting based on ZADEK et al.’s (1997) eight principles of quality in social accounting illustrate several differences between the two companies (Crane & Matten, 2016). However, the BMW group report has a high score since it embraces all the principles in its report. The eight principles are inclusivity, comparability, completeness, evolution, management policies and systems, disclosure, external verification, and continuous improvement.
Inclusivity: both reports reflect the views of all the stakeholders
Comparability: the BMW group provides annual or periodical CSR reports that can help readers compare its performance. However, the Maruti Suzuki does not have an annual report on the same.
Completeness: there is a difference in the completeness of the reports with the Maruti report lacking important details about its social activities. However, the BMW report is comprehensive enough to capture every aspect of its engagement in different parts of the world.
Evolution: the BMW report has an adequate commitment to learning and change based on the partnership and experiments in new areas. Unfortunately, the Maruti report does not illustrate similar commitments.
Management policies and systems: the CSR programs in both cases are institutionalized within the management systems of the organizations.
Disclosure: both reports provide adequate disclosure on the CSR programmes. However, the BMW report is more clear and illustrative than the Maruti report.
External verification: there is no external verification in both reports.
Continuous Improvement: Both companies are dedicated to improvements through collaboration and partnership to enhance their social influence. In particular, the BMW firm is dedicated to sustainability.
The relationship between Social Reports and Company Values
The BMW group social report demonstrates a strong link between the social programs and its core values. On responsibility, the firm commits to make consistent decisions and commit to them so as to have an efficient work plan. Indeed, the organization has lived to this value based on its social commitment and dedication to improving the lives of communities in which it operates (BMW Group, 2018a). Appreciation is an important value that shows the organization’s gratitude in its cooperation with partners all over the world. In its transparency value, the company embraces integrity in its operation and demonstrates it in its CSR reporting (BMW Group, 2018a). Indeed, this is a combination of transparency and openness in reporting since it documents or happenings around its CSR programs. The core values of the company are captured in the social report since it reflects the activities of the firm and represents them in details.
Maruti Suzuki has five core values which are responsible, dynamism, open, efficient, and reliable. Largely, the social report reflects these values but the report is not comprehensive enough to illustrate their applicability. Nonetheless, it is evident that the report is responsible, open, and reliable in describing the corporate social responsibility of the firm. In the aspect of responsibility and efficiency, the values demonstrate reliance and expertise delivery of services. Indeed, the report demonstrates how these values are incorporated by describing the CSR programs and providing a platform to contact them for inquiries. However, in terms of dynamism and openness, the social report does not reflect these values since it does not evolve with the modern needs of sustainability such as describing the technological advances used to ensure sustainability. In addition, the report is not open enough to describe the engagements of the firm in its CSR programmes.
Comparison between Group and Individual Conclusion
The most notable difference between the group and individual conclusion is the scope of the CSR programmes for the two companies. In the group, we noticed that BMW group has a more social commitment based on its reports but never went into details about their locations. However, while completing the exercise, I noticed that the group operates in different countries and region and replicates some of its CSR projects in a different location. For example, it enhances education in Asia, Africa, and China. In the case of Maruti Suzuki, the group and individual conclusions are similar. The firm only serves the Indian population and its social reports target the Indian audience.
References
BMW Group. (2018a). Our Culture. Retrieved from https://www.bmwgroup.jobs/us/en/culture.html
BMW Group. (2018b). BMW Group – Company. Retrieved from https://www.bmwgroup.com/en/company.html
BMW Group. (2018c). BMW Group – Responsibility – Commitment – Social Commitment. Retrieved from https://www.bmwgroup.com/en/responsibility/corporate-citizenship/social-commitment.html
Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
Maruti Suzuki. (2019a). Corporate social responsibility (CSR) – Maruti Suzuki. Retrieved from https://www.marutisuzuki.com/corporate/about-us/csr
Maruti Suzuki. (2019b). Maruti Suzuki cars in India � Arena, Nexa, True Value and Commercial channels. Retrieved from https://www.marutisuzuki.com/
Sathaye, J., Shukla, P. R., & Ravindranath, N. H. (2006). Climate change, sustainable development and India: Global and national concerns. Current science, 314-325.
United Nations. (2018). About the Sustainable Development Goals – United Nations Sustainable Development. Retrieved from https://www.un.org/sustainabledevelopment/sustainable-development-goals/
