Analysis Of Social Responsibility In BMW Corporation
Bayerische Motoren Werke AG (BMW), a luxurious multinational automobile corporation, is one of the most socially active corporations in the world. In 2016, BMW was selected as the most sustainable corporations in 2016 Global 100 Most Sustainable Corporations in the World Ranking with the score of 80. 10%, above Coca-Cola Enterprise and Apple. The successful incorporation of social responsibility in their business is characterized by mainly four components: Employee Orientation and Social Commitment, Corporate Social Investment Project, Sustainability Strategy, and Reporting Standard and Audit Quality.
The BMW employees understand their strict code of conduct, and the corporation expresses the clarity of their understanding of workers’ rights through their Code on Human Rights and Working Condition. BMW’s Group Code on Human Rights and Working Conditions in 2018 mentions their five crucial driving forces in the corporation’s employee orientation: appreciation, trust, transparency, responsibility, and openness (“BMW Group” 22). Their code of conduct particularly emphasizes the importance and protection of human rights by creating a favorable working condition within the company. Beginning with firmly forbidding child labor,forced labor, and discrimination, BMW promises health and occupational safety, and right to privacy. They also support right to collective bargaining in order to “recognize the rights of its employees” and “promote a regular dialogue between the workforce and the company,” creating a system of trust in the company (9).
One of BMW’s most recognized employee orientation systems is their training system. BMW’s extensive training process not only ensures safety in the workforce but also grants the long term employability of its employees through nurturing knowledge and skills (13). Historically, BMW has been continuously developing their education system. In 1999, BMW spent almost 90 million euros on employee development, which is similar to the budget of an average-sized German University (Murray et al. 400). Contemporary Issues in Management and Organisational Behaviour, a book written by Peter Murray, characterizes BMW as “close to being a fully developed learning organisation” (400). Promoting teamwork and effective dialogue between the employees, their training program is crucial to the success of the corporation because it empowers the BMW employees with not only the mechanical skills but also their ability to generate change and capitalize on the global knowledge. BMW associates also maintain a close relationship with their suppliers, perpetuating the cycle of learning through cooperation of different parts of the company. For example, this sharing of knowledge enables the suppliers to understand the company’s request and design while the associates can improvise on the suppliers’ limitations and process of production. Knowledge plays a crucial role in the BMW company as it creates favorable competition and cooperation, resulting in a close-knit, dependable group.
BMW further pursues philanthropic responsibilities by interacting with global communities through the Corporate Social Investment Project. The company focuses mostly on furthering education in developing countries and providing equal opportunities and access to learning. BMW’s Sustainability Value Report 2018 states that their educational project on technology and science reached over 316,000 children in 2018, higher than the number reached in 2017 ('BMW Group' 2). The group’s goal is to reach 1 million children in the education project by 2025 (2). One example of BMW’s educational project is BMW’s Excellence Project for Mathematics, Science and Technology in South Africa. As a developing country, South Africa holds great potential in technological growth and sustainable progress. To capitalize on the potential, BMW’s educational project helped young students to gain knowledge in the fields of science and technology and reduced the knowledge gaps within the country. The programme goes further than simply teaching scientific knowledge. It helped students pursue subject of technological development as undergraduates in electrical, mechanical, civil engineering, sound engineering, geology, and actuarial based disciplines (“BMW Excellence”). The graduates from this program becomes eligible to participate in BMW South Africa’s Trainee Programme to pursue a full-time employment in BMW. BMW South Africa also partnered with Sci-Bono, a children’s interactive science and technology museum in South Africa, to promote interactive learning especially in the field of science. This partnership provides a new platform of learning to the students and teachers in South Africa and provides a detailed understanding of the design and creation of BMW automobiles. Through this project, BMW motivates economic and technological development of the country and promotes personal development of young people. Ultimately not only the young students obtain useful knowledge and resources from the experience they receive from BMW, but also BMW gains valuable employees with a personal connection.
In the efforts of being socially responsible, BMW also focuses heavily on providing sustainable vehicles. Green Marketing is evidently one of the major components of BMW’s strategy of business as Herald Krüger, the Chairman of the Board of Management of BMW AG, states “Sustainability is a holistic task that is firmly anchored in our corporate strategy” ('BMW Group' 1). BMW’s goal is to create emission free-mobility and strive towards environmentally friendly vehicles. Following their goal, in 2018, BMW Group managed to decrease relative CO2 emissions per vehicle by 2. 4 percent year-on-year to a low of 0. 4 tons per vehicle (1). Since 2013, BMW has reduced the CO2 emission around 39 percent, and since 1995, the emission has decreased by 42 percent (1). They also cut down the CO2 emissions in the production network by 2. 7 percent from 2017 to 2018.
BMW continues to expand on the company’s development on sustainability by conducting a Biomass Project which is located near Rosslyn Plant in the Gauteng Province in South Africa. The Biomass Project functions with the biogas power plant which uses the biogas produced from 25,000 cows from a neighboring cattle farm ('BMW Focuses'). Biogas is a renewable source that uses plants or animal material to create energy. The cows play a crucial role in biogas fermentation process as they produce methane gas, which is later converted to energy by generators. This project fosters use of renewable energy in the process of production by recycling organic waste and preventing further release of methane gas emissions. While the BMW Plant in South Africa previously functioned solely with coal-burning energy, currently the plant has been slowly converting into using clean energy and is on track to be entirely carbon neutral by 2020 (“BMW Focuses”). Similarly, the BMW Plant in Spartanburg, South California also produces energy through using methane gas. Their source of methane gas is from raw materials from a local landfill. Recycling biomass is mutually beneficial to the company power plant and the environment.
BMW extends its global research on using alternative source of energy in order to create environmentally favorable vehicle from sustainable production line. More examples are the BMW Plant in Leipzig, Germany, where BMW creates electric vehicle models with wind power production, BMW Plant in Shenyang, China, where it used Thermal wheels, heating facility, to create sustainable heat. The extensive research for alternative energy allows BMW to create a most specialized and viable power plant in which every country the plant is located. Their effort to minimize CO2 emissions and environmental waste appeals to the environmentally friendly consumers as it helps consumers to be involved in restoring the environment by purchasing a BMW car and participate in creating a positive cycle of motivating innovation of electric engine in the automobile industry. The development in clean energy furthers BMW to extend its environmental knowledge and technology, helping other cars to evolve towards eco-friendly products in order to compete in the consumer market.
BMW’s reporting standard and audit quality furthers their social responsibility by ensuring trust to the market and providing a source of communication between the company and consumers. Transparency is key to BMW’s providing assurance and confidence in the product quality. In the rating from Carbon Disclosure Project (CDP), BMW received a score of “A-” in Leadership category, rated high for transparency of climate protection measures ('BMW Group' 3). Further, Institute for Ecological Economy Research and the business association “future,” has ranked the BMW’s Sustainable Value Report 2017 as the second best sustainability report by a German company (3). Their constant disclosure of data and information important to the consumers such as carbon footprint, production process enhances the trust between the consumers and the products, creating an honest market. This strategy leads to improving BMW’s reliability as a company and clear understanding of its contribution to the society. Further, because BMW retains a system of honesty, the company may be driven to conduct more socially responsible project and innovations in order to use the disclosing reports as promotions, appealing to the morals of the consumers.
While BMW is one of the most sustainable industries in the world, their claims on sustainability and transparency has not always been consistent. Recently, in April 2019, European authorities released a finding that BMW, along with Volkswagen and Daimler, secretly equipped their automobiles with inferior emissions equipment. The inferior emissions equipment fail to successfully control pollution emitted from the vehicle, contributing to the large portion of air pollution in europe that causes numerous deaths annually and diseases such as asthma and bronchitis (Ewing and Granville). The recent allegation reveals that BMW has manipulated the size of the tank that holds a fluid that cleanses diesel emission and hindered with the incorporation of filters that removes carcinogenic materials from gasoline engines.
Similar incidents had occurred in South Korea when 52 units of BMW vehicles started fire just during the period between January and November in 2018 (Kim). The cause of the fire was investigated and determined as defects in its EGR cooler, a component that lowers the temperature of exhaust gas. The investigating team in South Korea has stated that the flaws in the device made the coolant boil, which cracked the EGR, leading to the coolant to leak and ignite fire (Kim). The public anger, however, stems from a claim that the BMW Korea and German headquarters have known about the defect and tried to cover it up. The Ministry of Transport, through extensive investigation, has concluded that BMW headquarters had known about the defect since 2015, but continued to sell the faulty vehicle to Korea. BMW was fined with 11. 2 billion won as they did not report the problem immediately and recall any vehicles. Andrew Salmon, the author of “Modern Korea: All that matters,” states that the company’s failure to respond to the problem has tarnished their name in Korea (Ryall). Similar statement was made from Song Young-chae, a professor at Sangmyung University that BMW’s lack of honesty in solving problems has led to the public understanding the corporation has no respect for their Korean customers (Ryall).
While BMW strives to understand the importance of social responsibility and has been carrying on many sustainable projects and internally strengthening the company through employment orientation, certain problems have been reported which discloses some inconsistency in their goals of reaching philanthropic responsibilities. While the problems were not simply defects in the machine, the problems lie in the issue of transparency, which in turn threatened many people’s lives and destroyed the truthful relationship between the consumers. BMW deeply understands the importance of a business corporation’s position in social responsibility, evidently shown through their employee training system, global education projects, innovation in clean energy, and efforts to report quality. However, marketing is only possible if the consumer market have formed a trustworthy relationship with the corporation. BMW may have made progress in the society, but transparency is a major component of understanding for consumers to value the social work and form a connection based on trust.
