The Etisalat company’s history, services, market, and non-market stakeholders, and their respective power
Etisalat is a multinational telecommunication service providing company, which is based in the United Arab Emirates (UAE). At present, the company serves in more than 15 countries across Asia, the Middle East, and Africa. The survey of 2014 shows that Etisalat was the 14th largest mobile operator in the global context. The survey also investigated the customer base of Etisalat, which comprises nearly 180 million users. The company is considered to be the most influential and powerful telecommunication brand in the UAE. The size of the business operation of the company is quite impressive, given its total market capitalization, which is nearly $40.4 billion. The annual reports of the company show a strong position of financial statements and balance sheets (Ogunsanwo and Ajayi 48). A strong financial position depicts the long-term performance of the company.
Etisalat started its operations in the year 1976 by the name of Emirates Telecommunication. The company launched its first mobile network in the Middle East in 1982. With the passage of time, the company passed through developmental and growth phases to achieve the targeted milestones. The launch of Internet services in 1995 was another significant milestone for the organization and the step that helped it to cement its positive image in the UAE market. Etisalat reached another crucial stage of its economic growth in 2000 when the number of mobile users reached 1 million. As time passed, the company management introduced different services in the brand portfolio. Currently, the products and services of the Etisalat brand portfolio include the 3G mobile Internet access, 4G mobile Internet access, broadband Internet services, prepaid telecommunication and landline services in the local area, and post-paid dialup Internet access. The management at Etisalat has also taken part in the initiation of the system of WIFI Hotspots as iZone in shopping malls, restaurants, and cafes (Ogunsanwo and Ajayi 48). The company serves a huge customer base, which is currently satisfied with the provision of communication services. Etisalat is one of the pioneer Internet service providing companies in the context of the UAE market. At this point, the company has a very strong position in the UAE economy.
The stakeholders are the public and relevant entities, including other organizations whose policies and actions have a tangible effect on the company’s success. The stakeholder at Etisalat includes customers as the firm’s top priority, employees, investors and shareholders, labor unions, suppliers, business partners, the local community, government authorities, and regulators. The management at Etisalat takes care of different stakeholders having different interests, priorities, and policies. At the same time, the behavior toward stakeholders is dependent upon the extent of their influence on the company. In the case of Etisalat, not all of the firm’s stakeholders are equally powerful or influential regarding business decisions, policies, and strategies (Ogunsanwo and Ajayi 48). The maintenance of effective communication ensures that all the stakeholders receive information that is appropriate for their needs and builds an optimistic philosophy for Etisalat.
The power of stakeholders is not very strong because of certain competitive advantages, the most important one being the first-mover advantage. At the same time, the influence of government rules and regulations can affect the company’s operations. However, due to the diverse stakeholder base, the management at Etisalat has maintained a flexible approach to deal with the target population to manage cultural diversity. In the case of Etisalat, the possible stakeholders understand what the company is trying to achieve. The management at Etisalat strives to maintain the proper working communication patterns with employees and labor unions to promote transparency of the goals and objectives of the company (Khan 45). The communication with investors maintains the funding and capital structure at Etisalat. Clear communication with the customers contributes to the integrity of operations.
The Etisalat company’s practices in terms of ethics and CSR
Etisalat Telecommunication Company is working at the global forefront by using strands of ethics and corporate social responsibility, thus beating the competition. The company managers claim that their customer relationship framework is the essence of their successful business operations. The company endeavors at building a corporate and community world in which all participants will be supportive of one another. The company usually takes technology advancement seriously, focusing on the main factor of public safety and health (Ehie 3). The management is highly seeking the new changes for growth and development, which are inclined towards the involvement of ethics and morality within the business operations. The business strategies at Etisalat are meant to spur the economic growth in the company while enhancing the relationships with stakeholders and creating new ideas to beat the competition.
There are different approaches to gaining corporate social responsibility status in the business world. All of these approaches revolve around social issues and concerns. The CSR program of Etisalat implies addressing environmental and health-related issues in the emerging global climate changes. The company is an active member of the UN Global Compact Programs, which has changed the meaning of CSR and represented it in an entirely different way. The management of Etisalat is aimed at encouraging the new trend of CSR, which is known as “caused-based CSR,” and which urges the company to react to some of the global challenges from a humanist perspective and thus build sustainability (Nkana and Dafiovo 82). For example, the provision of clean water for drinking and other purpose is the main concern of the management of Etisalat in Egypt. Therefore, it is evident now that the company is trying to achieve the peak of sustainability by utilizing the benefits of CSR.
In addition, there are several other ways and directions that facilitate social responsibility fulfillment using the company’s main products and services (Khan 45). The Etisalat Telecommunication Company strives to satisfy the needs and demands of every stakeholder by shaping its corporate philosophy, standards, and policies. All of these steps are aimed at constructing a positive brand image in the market, thus affecting customers’ perception of the organization. The intention of the company is to make CSR its source of sustainable competitive advantage. Some of these include:
- Masmou: A particular mobile application portfolio, which assists customers with visual impairments to maintain the connection with their friends and family members.
- Egyptian Paralympics Committee: Etisalat is the official sponsor of the Egyptian Paralympics Committee (Khan 45), which promotes the concept of equality and believes that every person is entitled to the same set of rights.
- “Origin”: the Origin program is aimed at solving the clean drinking water dilemma in all areas where water is scarce, particularly, Egypt (Khan 45). Many other profit and non-profit organizations support the program and its cause.
- Ease of Web Accessibility (EWA): EWA is another major step for Etisalat Company to make the web browsing experience useful and exciting for the users by offering a chance to customize it based on their own choice (Khan 45).
All of these programs aimed at CSR promotion are highly influential for the stakeholders regarding the spread of the positive image of the company to the public. On the one hand, the shareholders and the investors are impressed by the company’s participation in the development of essential technological and social programs in Egypt. On the other hand, the customers are influenced by the launch of mobile applications that useful for visually impaired customers to stay connected with their interlocutors without any concern of network coverage (Ehie 3). The Government authorities can appreciate the participation of Etisalat in the development of the Origin Program, which is aimed at the provision of clean drinking water for citizens of Egypt (Saleh et al. 52). The attainment of CSR is highly appreciable for Etisalat as it positively increases the market position and brand power. Overall, CSR is the continuing promise by the management of Etisalat to behave morally and ethically and thus put in efforts in the economic development while improving stakeholder relationships and changing the public perception of the company.
The advantages and the disadvantages resulting to the Etisalat company from being a socially responsible corporation
It has already been discussed that there are different approaches for adoption and achieving a certain level of CSR. Therefore, it is evident that every step is not entirely beneficial and free of cost for achieving sustainable development. Every organization has to face certain opportunities and challenges and pay some cost for achieving that certain level of CSR in the market (Ogunsanwo and Ajayi 48). In a similar manner, there are many advantages and disadvantages for Etisalat to follow the CSR pattern in the field of environment and health protection (Nkana and Dafiovo 82). Corporate strategies at Etisalat are supposed to boost the business development while encouraging mutual relationships with all the possible stakeholders and thus coming with innovative and new business ideas to sustain the competitive advantage.
Etisalat initiated a new trend of being socially responsible, which is linked to the cause-based action plans of the company. These cause-based action plans motivate managers to act in response to some of the global challenges in the most ethical way and thus gaining a sustainable competitive advantage (Ehie 3). There are some of the pros and cons to this approach, which is currently used by Etisalat. Among many other advantages, improvement in the public perception of the company and the enhanced brand power are the main advantages of being socially responsible in the corporate world. The management of Etisalat has planned to use its improved ethical and moral stance for enhancing the brand power and thus making even more profits and revenues. Considering the impact on stakeholders, it becomes evident that most of the time, people want to have connectivity with the popular brands and develop an emotional bond with their brand (Ogunsanwo and Ajayi 48). Therefore, Etisalat has managed its supply chain using the power of SCR.
Another advantage for Etisalat proved its effect when most of the state and regularity authorities became less hostile towards the company’s practices. The state and regulatory authorities are also considered as a stakeholder for the telecommunication company because of the influence that their policies produce on the company (Khan 45). In addition, the management gets success in attracting even more investors for the capital structure development. In this scenario, every investor wants to invest their money in a business where the profitability ratio is ensured and expected to increase in the future (Saleh et al. 52). The achievement of sustainability in a CSR-driven environment y is highly substantial for Etisalat Telecom Company as it positively boosts up the market position and the perception of brand power.
In addition to the pros, advantages, and benefits, there are always some limitations to adopting any policy in the target field. For instance, the managers of Etisalat have to face certain challenging situations, which have arisen because of the sustainability initiatives described above (Khan 45). The managers have to shift their entire objective from profit-making to managing ethical concerns and fostering moral values in the community. Although this shift is apparent because of the hidden aim of making even more profits, the company’s direction may change because of the change in the company objectives. The managers at Etisalat have maintained the business strategies that are aimed at enhancing progress and development while increasing shared relationships with all the stakeholders. The managers want to involve the business operations with innovative ideas that support economic and technological growth to retain Etisalat’s competitive advantage.
One of the significant challenges for Etisalat is to handle the increased cost of production for all its community development programs in Egypt. The Origin programs and the provision of clean water are those initiatives, which are not relevant to the company’s operations (Nkana and Dafiovo 82). Because of this irrelevance, the management of Etisalat has to face an increase in the costs of production or the expenses taken to fund its programs. Despite all the challenges and benefits, the initiation of CSR steps in the business setting always affects the stakeholders of the company positively, which is evident in the case of Etisalat. If the initiative is highly productive, the management can cover the increase in the cost of production.
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Saleh, M. T. et al. “Customers’ Perception of Corporate Social Responsibility (CSR): Its Impact on Word-of-Mouth and Retention.” Innovative Marketing, vol. 11, no. 2, 2015, pp. 49-55.