Analyzing Rolls Royce's CSR Practices and Their Impact

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ASSIGNMENT 2: CORPORATE SOCIAL RESPONSIBILITY
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Table of Contents
Introduction......................................................................................................................................2
A brief summary of the selected business......................................................................................2
Rationale..........................................................................................................................................2
The rank of the company with regard to CSR.................................................................................3
Specific examples of the company’s corporate actions by which the company achieved this
ranking:............................................................................................................................................3
Approach of the Rolls Royce to CSR practices...........................................................................3
Development of strategies and policies within the changing environment for meeting the
interests of stakeholders...............................................................................................................4
CSR projects of this company.....................................................................................................4
Development of people, leadership and management.................................................................5
Dependency of the customers’ decision of purchasing on the CSR approaches of the company...5
Factors of CSR that influence the choice of customers...............................................................6
The relevance of CSR in the current business environment............................................................7
Conclusion.......................................................................................................................................8
Reference List..................................................................................................................................9
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Introduction
This present context is about the corporate social responsibility practises of the Rolls-Royce
Aerospace Company. It is a very well known multinational company of the United Kingdom.
The business practises of this company want to produce a positive impact on the society.
Therefore, the management of this company is very conscious about the corporate social
responsibility (CSR) activities. The present rank of this company regarding the corporate social
responsibility has been discussed in this present context. The leadership and management
practices and the strategies as well as policies to meet the interest of the stakeholders by which
the company gain that ranks has been explained. Dependence of the purchasing decision making
of the customers on the CSR practices of this company has also been described. Moreover, the
relevance of these CSR practices in the present business operations has been included as well.
A brief summary of the selected business
Rolls-Royce is a very well known company of the United Kingdom. The company deals with the
luxury cars and later the aero engines. Charles Rolls and Henry Royce established this company
in 1904. This company belongs to the motor vehicle and aerospace design and manufacturing
industry. The headquarters of this company is in Derby, England. The motor vehicle and aero
space design manufacturing industry is actually the part of the vehicle engineering. Many other
elements of this business are safety engineering, software, electronic, mechanical and electrical
engineering. This business practises include the modification of the vehicles and manufacturing
process of aero space engines. This industry mainly assembles and creates the parts of the
automobiles.
Rationale
This company has a very good rank globally with regard to the CSR practices. Therefore, the
CSR practices of this company are very significant for the other business organizations. The
choice of the organization has been done with respect to the present business era as the business
leaders not only focuses on the profit but they also want to produce a positive impact on the
society to attract the customers. In order to survive in the competitive market, the analysis of the
CSR practises of Rolls Royce may help the business organizations.
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Another reason for choosing this particular topic is that the present researcher can easily obtain
adequate information on the selected organization. The Rolls Royce is a renowned company
therefore; many researchers had conducted researches on the CSR practices of this company.
Those previous researches can provide adequate secondary data about the CSR practices of the
respective organization and those secondary data is very helpful for this present research.
The rank of the company with regard to CSR
The business leaders of the automobile and aerospace design and manufacturing companies are
always willing to expand their businesses globally (Slack et al., 2015). Therefore, the companies
have to face lot of competition in new markets. In order to survive in this competitive market, the
companies try to improve their CSR practises to attract the customers to those companies’
product (Amaeshi et al., 2016). Rolls Royce Aerospace also tries to produce a positive impact on
the society with help of CSR practises. The company owns 5th position in the CSR ranking after
Lego, Ikea, Microsoft and John Lewis Partnership (Prmoment, 2019). The CSR approaches and
projects are conducted by the governing team of CSR practises of this company. These
approaches and projects help the company to achieve the recent position of in the global market.
Specific examples of the company’s corporate actions by which the company achieved this
ranking:
Approach of the Rolls Royce to CSR practices
Sustainability is the main focus point of this company. The vision of this company is to provide
better power that can change the world. The CSR practises of this company include economic
improvements and wellbeing with the social communities that increase the good will of this
company in global market. Community investment is the part of the CSR practise of this
company. The company also contributes in charitable trusts and social sponsorships to the
education and skills. The Rolls Royce STEM educational programs targets to educate 6 million
people globally within 2020. This company also creates various policies to contribute and
support to the education of the talented engineers. Various other significant strategies and
policies in the CSR practices of this company such as enhancement project for livelihood,
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education for differently-abled persons, elderly people, women and children, different vocational
skills program for enhancing the employment and special education.
Development of strategies and policies within the changing environment for meeting the
interests of stakeholders
Rolls Royce Company also develops many strategies and policies (such as SMEI, Charitable
trust) to meet the interest of the stakeholders. The stakeholder may be defined as the individuals
who are directly related to the company and the company’s profit and loss. The employees, third
party vendors, customers and the investors are the stakeholders of the company who involve in
the business process of this company (Bason and Anagnostopoulos, 2015). The company
includes the interest of these stakeholders in its CSR practises. Rolls Royce contributes too much
in many schools for the especially abled children and women. The company also supports the
education of the employees and their children. This company also maintains many charitable
contributions to increase the students’ interest and encourage them to study mathematics,
engineering, technology and science in the STEM project of Rolls-Royce Company. The vision
of this company helps them to improve the CSR practices and this developed and improved CSR
practises help the company to own the 5th rank with regard to CSR. The company try to provide
better power to the customers. The company also contributes for the innovative ideas those can
secure the future of the society. The company’s CSR is based on the today’s achievement and to
help to develop the business operations of the company. All this contributions and CSR program
helps the company to achieve expected success in business operations.
CSR projects of this company
The Rolls Royce Company is the second best company of United Kingdom as per the CSR
practises. John Lewis partnership is situated in the first position of this ranking regarding to the
CSR practices. The company achieved a good rank globally and the CSR projects of this
company have helped to achieve it such a rank.
The company undertakes all the CSR projects with help of registered societies and trusts. The
company has a vast experience in these kinds of projects and programs. The company creates a
fund for these kinds of projects and programs.
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As per the corporate social responsibility act 2014 for all the corporate companies, all the private
companies have to follow the social responsibilities. Rolls Royce Company also amends this act
in real time. The company contribute a percentage of the annual profit to the CSR activities in
every country where its branches are located.
The company has created a CSR governance committee in every branch. The main objective of
this committee is to supervise the funds of CSR activities of the company. This governance
committee also controls and maintains all the charitable contributions and Social Sponsorships
Policies and procedures of the company. According to the Global code of Conduct, the company
ensures that all the charitable contributions are proportionate and appropriate. Another strong
business ethics of this company is that it never contributes and donates any percentage of the
profit to any political parties or corporate organisations. Corporate contributions are strictly
prohibited for this company. It also does not contribute to the academic organizations and
charities that are related to any political parties or political personalities.
Development of people, leadership and management
The company also contribute the money to develop the professional skills of the employees. The
external trainers and technology experts are hired to perform this training process. The
management and company follow democratic leadership and help the employees to lead a secure
social life with respect to the activities of CSR program. In this program, the company also
ensure the balance of the professional and social life of the employees.
In this way, the company gained 5th rank among all the multinational companies globally with
regard to the CSR activities with help of CSR approaches, strategies, policies, development
process of people, management and leadership and CSR projects.
Dependency of the customers’ decision of purchasing on the CSR approaches of the
company
The marketing department of the corporate companies creates many policies and strategies to
attract the customers to those companies’ products and services (Schrempf-Stirling et al., 2016).
The marketing team of the companies study the market and research on the likes, dislikes and
needs of the customers and depending on that information, they apply different strategies to
influence the customers’ decision on purchasing the products and services (Unit, 2015). The
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CSR practices and marketing are related to each other. Both of them deal with various
approaches and strategies. Marketing is actually based on the mutual relation between the
customers and the companies (De Klerk et al., 2015). The CSR approaches develop and improve
this relation. Therefore, the customers attract to the companies’ product and services (Preuss et
al., 2016).
Factors of CSR that influence the choice of customers
Community: The CSR approaches of the corporate companies provide wide range practices for
the social community (Wang et al., 2016). The Rolls Royce Company provide various charitable
programs for the community, which influences the customers’ decision of purchasing.
Employees: The companies provide different training and learning programs as their CSR
activities to develop the professional skills of the employees. Rolls Royce also contributes a
percentage of the profit in these kinds of training processes. It affects the choice of customers.
Environment: The corporate companies also contribute for saving the environment and local
eco system (Adeneve and Ahmed, 2015). Rolls Royce contributes for making the pollution free
zones in the society and it influences the customers’ decision making about purchasing.
Ethics: The CSR activities develop and improve the professional ethics of all companies (Galant
and Cadez, 2017). It improves the organizational culture and a good message goes to the
customers that influence the customers’ choice. The automobile companies like Rolls Royce also
apply this technique to influence the decision making of the customers for purchasing.
The corporate social responsibility activities also influence the financial performance of the
companies (Filatotchey and Stahl, 2015). The financial performance of the company depends on
the satisfaction level of the customers. Therefore, the companies try to provide proper
satisfaction to the customers by providing better quality products and services. CSR practices
helps to create goodwill of the company in the market. It is very important to improve the
financial performance of the company. The Rolls Royce Company always maintain some
professional morality with help of their CSR practices. It helps to create a trust worthy image
among the customers and that influences the customers’ decision making on the purchasing.
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The relevance of CSR in the current business environment
In the previous time, the only objective of the business organisations is to gain maximum profit
(Epstein, 2018). However, the time has changed now as the business leaders are extremely
conscious about building customers’ relation and achieving customer satisfaction as they have to
handle lot of competition in the market. The business leaders also try to improve their reputation
and develop a good will in the market. It is the only way to survive in the competitive market.
CSR program is a way to improve the relation between the customers and the company.
Therefore, the corporate social responsibility program is quite relevant for the present business
operations. The concept of CSR activities is rooted well in the business agenda of the corporate
organizations. Some positive impacts can be gained by this program such as:
1. It improves the financial performance of the company.
2. It can lower the operating costs of the company.
3. It improves the image of the brand and enhances the reputation.
4. It increases the product quality and annual productivity.
5. It helps to access the capital.
There are many positive impacts of CSR practises in the business operations. Therefore, the
globally renowned companies like Rolls Royce contribute a percentage of the annual profit in the
CSR approaches and projects to influence the decision making of customers for purchasing the
products. In addition, the respective company also conducts the CSR activities in order to
perform some social duties such as it helps the survival and growth of society. Therefore, the
CSR program is quite relevant for the corporate companies like Rolls Royce.
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Conclusion
It can be concluded that, this present study focused on the corporate social responsibility
approaches and programs of Rolls Royce Company. The company has owned fifth rank with
regard to the CSR practices among the renowned multinational companies of world. The
strategies, policies, development plans for people, leadership style, approaches and projects are
included in the CSR practises of this company. These help the respective company to attain such
a position globally. Different factors of CSR practices those can affects the purchasing decision
of the customers had been also described in this context. Lastly, the study provided adequate
information, which proved the relevance of CSR practices in present business operations in an
efficient manner.
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Reference List
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O.I., 2016. Corporate social responsibility in SMEs: a shift from philanthropy to institutional
works?. Journal of business Ethics, 138(2), pp.385-400.
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Epstein, M.J., 2018. Making sustainability work: Best practices in managing and measuring
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Filatotchev, I. and Stahl, G.K., 2015. Towards transnational CSR. Corporate social responsibility
approaches and governance solutions for multinational corporations. Organizational
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Schrempf-Stirling, J., Palazzo, G. and Phillips, R.A., 2016. Historic corporate social
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