Corporate Social Responsibility: Etisalat Company Case Study

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Corporate citizenship refers to mechanisms within an organization whose main aim is to encourage self-regulation (Habisch, Jan Martina, Schmidpeter, 2005). The core components of corporate social responsibility include respect for the law, and preservation of ethical standards and internationally accepted practices. This emphasizes the fact that other than being answerable to the shareholders, companies are also answerable to consumers and the community in which they operate. Through this process a company ensures that its activities are not detrimental to both the community and the environment. However, for it to be successful a company must integrate it into its business model (Habisch, Jan Martina, Schmidpeter, 2005).

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The benefits of corporate social responsibility include increased company visibility and enhanced support by the local community. In due course of time it may result in improved revenue and profitability. Its opponents have argued that corporate citizenship diverts a company’s resources and effort to non-core activities. It has been argued that it increases operational costs leading to reduced profits. A company is primarily answerable to its shareholders and not the customers. Therefore, a company should focus on maximizing return on investment.

Etisalat is a company registered in the United Arab Emirates. It was incorporated in the United Arab Emirates and the gulf region in 1976 (Etisalat, 2012). Its headquarters is in Abu Dhabi. It is a telecommunications firm catering for a wide range of clientele including other corporations, individuals, content providers, internet service providers, small businesses, mobile operators, and other telecommunications companies. It offers both data and voice services. It is the largest telecommunications firm in the Middle East by subscriber numbers. It has about 18 million subscribers. It operates mainly in the Middle East and Africa; its operations are located in 18 countries across Africa, Asia, and the Middle East. Its annual revenue is estimated to be 8 billion US dollars. It has been honored for excellent services offered to customers. The corporate vision of Etisalat is ‘A world where people’s reach is not limited by matter or distance’ and its mission is ‘To extend people’s reach’ (Etisalat, 2012).

The core philosophy of the company is ‘service to the community’. This implies that the company is concerned about the welfare of the community in which it operates. It ploughs back some of its profits into the community with the aim of improving lives and protecting the environment. The money is channeled to the community through various initiatives like environmental protection, and consumer protection in Africa and the Middle East (Etisalat, 2012).

In particular Etisalat has been able to support education in various countries in which it operates. It has done this through donation of reading materials and provision of physical infrastructure. It has provided money for the development of schools, colleges, and research institutions. In some instances, especially in Africa, it has provided further training for its employees. In general, Etisalat believes that education influences people’s lives. The company has also supported initiatives that support social justice (Etisalat, 2012).

It also supports cultural events and cultural development. It operates in different regions with different cultures. The company being of Saudi Arabian origin has to adopt an image that is compatible with its vision and mission in different parts of the world in order to stay ahead of the competition. Etisalat embraces cultural diversity because different cultures utilize its services differently.

One of Etisalat’s core values is freedom of communication. Further, it believes that all members of society deserve freedom of communication. This belief has enabled them to develop products for special needs groups. Some products like phones offered by Etisalat are designed to ease communication for the special needs groups. It is among the sponsors of the Paralympics. This reiterates their commitment to fair treatment and equity.

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The company’s corporate social responsibility policies are sound. Its policy on education is particularly commendable. The company seems to understand the need for education in the communities where its businesses are located. Other than assisting individuals meet their aspirations, education is also important to the company. The trained members of society provide skilled labor to the company. Therefore, this strategy benefits both the company and the community. Its policy on special needs members of society is equally good. This enables the special needs groups to access information easily at an affordable price.

However, its policies on environmental protection are not very clear. It only mentions protection of the Environment for future generations without any specifics on how it intends to achieve that. The company seems to be preoccupied with the human aspect of corporate citizenship. It has not invested much on initiatives that can reduce the impact of their services on the environment. The environment can negatively affect their business in future. An inhabitable planet would not be good for any business.

The corporate social responsibility policies of the company also indicate that the company is a profit oriented organization. The policies were put in place not for the good of the community but to enhance its visibility among prospective customers.

These policies are weak on account that they tend to divert resources of the company to non-core issues. The company may make loses if the policies are not revised. There is no evidence to suggest that the policies are incorporated into the business model of the company.

Corporate social responsibility can be a powerful marketing tool if applied correctly. It is imperative that those charged with the responsibility of formulating corporate citizenship policies understand the company’s short term and long term goals. If this is not done well it can result in a situation in which an organization engages in meaningless activities that could lead to its failure. Policies must be balanced between those focusing on the community and those focusing on the environment.

It is important to note that each company must give back to the community. No company has the right to exploit the community and enjoy all the returns alone. Part of the profits made should be used to improve the lives of the consumers. It is not morally right for an organization to damage the environment and not do anything to mitigate this damage. Activities of any given company have an impact on the environment. The telecommunications industry in particular generates an enormous amount of electronic waste. If this waste is not handled well then environmental degradation can reach unprecedented levels. Companies should therefore be concerned more about the environment than raising its profile through sponsorship of community activities. Companies should not overlook the fact that environmental degradation may put them out of business in future. Future generations deserve a good environment too. A safe planet is good for business.

References

Etisalat. (2012). Web.

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Habisch, A., Jan, J., Martina, W., Schmidpeter, P. (2005). Corporate Social Responsibility across the Europe. Heidelberg: Springer.

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