Introduction
Public perceptions are more important than anything else now. It is for this reason that successful corporate world do not have concern with only their profits but they have to take part in various social activities also. Global organizations have to meet up with the international standards of business ethics as well. The corporate social responsibility thought first came in to being in 1960s and now it aims at serving and taking care of the environment, communities, workforce, and governance. An organization with a CSR label is believed to behave ethically. However, there is a little difference in the concepts of corporate social responsibility and ethical behavior that will be discussed later on. This paper discusses about the Rolls-Royce corporate social responsibility and how the organization does behaves in the market or community. Moreover, what measures helps in evaluation the ethical behavior of the organization .
Business Ethics and Corporate Social Responsibility
Business Ethics are the ethical codes for the conduct of the business based on concepts of what is fair, right or wrong. People follow different consciences either directed by their religion, customs, cultures or their own to make decisions for business. Some people are also affected by their immediate colleagues, superiors or friends regarding the ethical principles at businesses. Since recent years, top industries and firms at market have started developing code of conduct of their business that helps managers to take important decisions. However, the basic ethical or unethical practices can easily be identified; for example, an organization should not employ child labor, should not be engaged in bribery, or should not use copyrighted material unlawfully.
In relation to the business ethics, corporate social responsibility is the philosophy of the business that emphasize on the importance for firms to behave as responsible corporate citizens. It does not merely means businesses obeying the law but conducting their marketing and production activities in a way that avoids causing exhausting finite world resources or environmental pollution. Several industries and firms have started behaving in a socially responsible manner either manager want this kind of behavior or because of the fear of consumer or environmentalist pressure groups and their image in the market.
Though, the terms business ethics and corporate social responsibility are linked to each other but it is not necessary that companies who are engaged in corporate social responsibility activities also behaves ethically. There are several examples of such companies who do not act in a way they say. However, the ethical behavior of the organizations is important because, it helps organizations attracting and retaining the best employees, building up an image in the market and thus maintaining successful relationship with suppliers, customers, and governments .
Corporate Social Responsible organizations take part in different ethical activities and areas including environmental, social, community, workplace activities, ethical governance, and marketplace conduct. It measures the direct or indirect impact of organization products and services and their suppliers’ impact on the environment and community. Workplace activities involve treatment with employees including selection, recruitment, equal employment opportunity and diversity. Marketplace conduct involves the behavior of the organization regarding purchasing, developing, marketing, and selling products and services .
Rolls Royce is a global marine, aerospace and an energy company that provides services and power systems to about 600 airlines, more than 2000 marine clients, and 160 armed forces. There are about 38,000 employees in Rolls Royce at 50 countries out of which 22,000 are employed in UK, 8000 in North America, and 5000 in rest of the Europe. The total annual sales of the company range £6.6 billion.
An organization is the part of corporate environmental management that includes carrying out various activities like working on community projects, and providing grants and loans to the young people for starting up their own business. It worked with various charities like the Prince’s Trust for the young people to boost their confidence and motivation. Rolls-Royce chooses the suppliers on basis of the reason that they must follow environmental and social standards as described in the company’s book of relationship manual.
Rolls Royce is making an effective participation for the problems of climatic changes and other related environmental issues. The organization promises to help the society by developing solutions for delivering sustainable economic growth and protecting the environment. Currently, the organization is also taking part in the program that is aimed to provide continuous improvement of services and production activities around the globe. The Rolls-Royce also yearly invests in research and development so to invent revolutionary technologies that can reduce emissions, less fuel burn, and noise in company products.
In order to behave responsibly, the organization devised and implemented certain strategies. It made investments in improving manufacturing activities so that to meet the standards of world class environmental performance. The company has been always involved in improving the impact of its products over the environment. Rolls-Royce was the one who produced first commercial jet engines in 1950s. Moreover, the company’s engineering expertise also helped in reducing noise by 75% and aircraft fuel burn by 70% .
The energy group of the Rolls-Royce Company has also made great contributions for the environment. The Industrial Trent has been able to reduce NOx emissions by factor of 10 which has contributed in improving the air quality. In addition, the company is also investing in new technologies of low emission combustor. In comparison to the conventional marine diesels, Rolls-Royce diesel engines provide high power and efficiency propulsion in marine sector. Moreover, the gas fuelled Bergen K Engine has been able to reduce NOx up to 90%.
The aviation group of the Rolls-Royce Company is highly emphasizing on improving the environmental conditions. It has become a partner of ACARE which has aimed to achieve three goals by year 2020 i.e. to reduce CO2 emissions per passenger kilometer by at least 50%, to reduce NOx emissions by about 80% and to reduce aircraft noise by about 50%.
In an aim for reducing CO2 emissions in aviation group, Rolls-Royce is contributing great efforts since year 2000 and it has already introduced certain innovative technologies that have reduced gas turbine fuel burn. It is believed that the aims of ACARE will soon be accomplished as significant progress has already been made to reduce CO2 emissions. Similarly, Rolls-Royce’s Trent engines use combustor technology by which the NOx emissions have considerably been reduced. The group is soon introducing Trent 1000 that will further improve the performance. Rolls-Royce has also been researching on an issue of noise reduction for about past 40 years. It has already been able to reduce much noise and soon it will achieve ACARE aim.
As like the aviation group, Rolls Royce is also focusing on reducing the environmental impact due to products and services of marine, defense, and energy. At marine, Rolls Royce has been able to offer significant improvements at ship propulsion systems. The gas turbines used in the Company’s ships offer lower emissions of NOx as compared to diesel engines. Similarly, at defence, noise and curb emissions are important issues that cause pollution in the environment. The Rolls Royce fan system and WR-21 gas turbines technologies are contributing in this mission to reduce fuel burn. The organization is also making efforts since past ten years to improve efficiency of power engine gas turbines and introduced Trent 60 that produces low carbon monoxide and NOx emissions.
Rolls-Royce has been the part of corporate social responsible team of organizations since a decade. In year 2002, Rolls-Royce voluntarily participated in UK Emissions Trading Scheme that was aimed on reduction of greenhouse gas emissions. Later the group participated in several other agreements and lastly achieved reducing 30 per cent of gas emissions. Thus an organization does not only claim to be the corporate socially responsible but also behaves ethically.
Rolls-Royce invests about £700 million a year in Research and Development. About two third of this amount is invested in to improve the environmental performance of company’s products and services. £120 million of the total amount is dedicated for advanced technology. Research and development sector of the organization has achieved various goals over the past 50 years like reducing the noise in aircrafts and fuel burn but an organization is still committed to improve engine efficiency so that to make it environment friendly .
In addition to the environmental responsibility, Rolls-Royce takes part in social activities so that to improve the living conditions among communities. It puts in large amounts of money and time in universities, colleges and schools to provide science education at helping institutes as well. This ethical behavior not only adds in to the CSR book of principles but it also helps the employees at the organization to design something more innovative and benefit the communities. Rolls-Royce corporate social responsibility programme mainly focuses on nurturing scientific talent. Currently, an organization is involved in various projects aiming to provide science subjects’ education to pupils at UK, Europe and US, and is spending about £500,000 a year on these types of programmes.
In year 2004, Rolls-Royce tool an initiative of Science Prize that was aimed at promoting new science teaching ideas and also to contribute in development of professional teachers. This scheme distributed £75,000 in the first year among 39 winning schools and £100,000 reserved for the same year. An organization is kept on making improvements to such programmes and thus instigating the students and teachers to bring innovations in science and contribute in for the welfare of environment and social community .
Roll-Royce also encourages its staff to get involved in engineering education at schools, colleges and universities. The professional staff working with the young students not only help the students knowing about the practical world of engineering but also help the organization to choose the best potential employee. Rolls-Royce conducts workshops at campuses in UK and US that gives exposure to students and teachers. The organization also offers them internships so that they can earn the practical knowledge of engineering courses .
In order to measure the ethical behavior of any organization, social audits are being conducted. This audit checks for the market performance, product and service, operational matters, financial matters and organization and people. Moreover, the code of conduct is measured against the activities that are actually being performed at the organization. Moreover, the ethical behavior of the organization is measured as according to the corporate social responsible behavior .
Rolls-Royce is corporate social responsible organization and conducting various CSR activities to build up its reputation among the community and earn better profits but upon measuring the ethical behavior it was being accused of bribery . The organization faced allegations that it bribed to an executive who was involved along with two other Chinese Airlines. It contains the deal of worth £1.25 billion in 2005 with Air China and in 2010 with China Eastern. These allegations have highly damaged the reputation of the organization in the market and community .
Paying fair tax amount to the countries where organizations operate is the moral and corporate responsibility. Organizations usually seek to hide taxes by showing fewer profits or other techniques which is considered as an unethical behavior . Another issue of the Rolls-Royce further added negative impact of the organization. In year 2012, the company earned global profits of £1.4 billion but it did not pay UK tax. Though the same year, company also earned £11 million from Treasury in reliefs, tax credits and rest of the adjustments .
However, besides such allegations, an organization is committed to behave ethically. It has developed various programmes to ensure that company is following ethical behavior. Recently, the Rolls-Royce has introduced Ethics Reporting Line that allows the employees to talk to anyone outside immediate unit of the organization if they believe the company has broken the code of conduct or law. This facility is already active in North America and is called as the Ethics Helpline. This helpline will soon be extended in other countries as well as per the operating law.
Environmental Reporting and ISO 14000 standards are being used for estimating the ethical behavior of the organizations. There are about 35 per cent of the organizations in the world that publish their performance and policies on the environmental care. This report not only acknowledges contribution towards environment but also adds good image of the organization worldwide. Similarly, ISO 14000 covers the areas like environmental management system, environmental auditing, and environmental labeling and so on. Rolls-Royce has the ISO 14000 certification.
Conclusion
Rolls-Royce has been conducting various programmes to prove being the socially responsible organization. It is playing an important role in introducing advanced technology that can help in minimizing the negative impact on environment. Similarly, it is also taking part in improving the social environment by helping the students and teachers at schools, colleges and universities and offering these institutes with funds. Moreover, Rolls-Royce is an equal employment organization offering equal rights to all employees. However, besides all these efforts for being called as the socially responsible organization, the Rolls-Royce also needs to focus on its image regarding ethical behavior.
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