Vodafone and Etisalat

Comparison of Vodafone and Etisalat on Ethics and Social Responsibility

Part I

I. Introduction

Profit is not everything. At the very least, organizations exist with people around and operate in an environment that is wanting for protection. For this reason, as organizations doggedly try to achieve their stated goals and objectives, they must concomitantly examine their impact on people and environment.

When it comes to people, organizations' immediate concern is their workers or employees. Workers must be assured that they function in a safe and healthy workplace, and their values reinforced rather than destroyed. This is the purpose of studying ethics and professionalism in the context of organizations.

Likewise, organizations cannot disregard the serious problem the environment is facing today. Because of the erroneous practices in the past, organizations contributed a lot in environmental degradation. Corporate social responsibility and sustainable development address this concern. Many organizations are now engaging in these activities to avert its worsening condition.

In this paper, we will be looking into the two big giants in the telecommunications business, the Vodafone and the Etisalat. Basically, we will be comparing side by side their code of ethics, their corporate social responsibility programs, environmental sustainability projects and their policies on human resources and labor union. Hopefully, by doing so, we will be able to understand the similarities and differences of their approaches and policies and why such similarities and differences exist.

II. Code of Ethics

A. Vodafone

Vodafone's code of ethics is very encompassing and extensive. It is carefully laid out in what it calls ‘business principles'. It is worthy to note that the company's success is defined by its “commitment to ethical conduct in the way it does business and interact with key stakeholders” (vodafone.com, Ethics). The company expects its employees to act with honesty, integrity and fairness.

Vodafone's business principles addresses ethical issues regarding bribery and corruption, conflicts of interest, data protection, environment, health and safety, human rights, political contributions and lobbying, and transparency.

On bribery and corruption, the company imposes a policy of zero tolerance. An Anti-corruption Compliance Guidelines is in place as a manifestation of commitment for the company to “comply in all respects with all applicable domestic and international laws, standards and principles relating to anti-corruption in each of the jurisdictions in which the Group trades, operates or has any other activity” (vodafone.com, Policies).

Vodafone has what it calls ‘Duty to Report' policy. It is the obligation of all employees to report any perceived “incidents of dishonesty, financial malpractice, illegal activity or breaches of the company's business principles or policies” (vodafone.com, Policies: Duty to Report).

The business principles are not only implemented internally. The company sees to it that suppliers also follow these principles through its Code of Ethical Purchasing (CEP) and Supplier Assessment. The CEP establishes the standards that the suppliers are expected to abide by, and this is based on Vodafone's values and international standards, which include Universal Declaration of Human Rights and the International Labor Organization Convention on Labour Standards. A publication titled, “Working with Vodafone - A Guide for Suppliers and Contractors,” is readily available for suppliers' and contractors' guidance. The handbook highlights “Vodafone's commitment to being a responsible business, including the Business Principles, CEP and its approach to responsible network deployment and health, safety and wellbeing” (vodafone.com, CEP). Suppliers and contractors are encouraged to report incidents pertaining to “corruption, fraud, poor labour and environmental practices, governance issues and community matters” (vodafone.com, Whistle-blowing).

To make the implementation of ethical commitment be effective, the company undertakes awareness programs. The business principles and duty to report policy are incorporated in the induction material, online and face-to-face training and team briefings.

B. Etisalat

Etisalat adheres to the policies and laws being implemented by the Ministry of Labor and Social Affairs. As such, its code of ethics is spelled out in the following.

b.1 Prohibition of forced or compulsory labor

Etisalat recognizes that it is unethical to undertake forced or compulsory labor. It believes in freedom of choice, and its workers are hired in their own volition to join the company.

b.2 Prohibition of child labor and minimum age of employment

To maintain its ethical standards, Etisalat is determined to only employ workers over 18 years of age and to assist other companies to do the same through information drive.

b.3 Acceptable working condition

It is the commitment of Etisalat to make its workplace totally acceptable to its employees. Etisalat's definition of acceptable working condition does not only apply to physical surrounding but more importantly it also applies to friendly interactions between and among employees.

b.4 Discrimination

It is a longstanding ethical practice of Etisalat to admonish any employee who manifests discriminatory behavior against its coworkers. This is not only observed within the workplace but it is also observed outside the company's premises.

b.5 Persons with Disability

Etisalat's ethical stand on persons with disability is consistent with its policy on discrimination. Disabled persons must be given ample opportunity to mold its career growth in the company.

III. Corporate Social Responsibility Program

A. Vodafone

The core values and principles of Vodafone speak well about its corporate responsibility and greatly influence its commitment to communities. The company states very clearly its stand on the matter. It declares that to Vodafone “social investment is not an add-on to business activities, but at the heart of how we engage with the communities where our customers, employees, investors and suppliers live” (Vodafone.com, Social Investment Policy).

Its contribution to communities is more than financial. Its social investment is geared toward creative research and programmes that can help to solving the pressing problems of the times. Furthermore, its social commitment will primarily focus on the following: reaching the excluded, promoting sustainable business practice and environmental protection and supporting the personal involvement of our employees in their local communities.

The focus of its social investment programmes includes disaster relief, mobiles for good, world of difference, local foundations, and UK programmes.

a.1. Disaster relief

The Vodafone foundation has been tireless in providing relief in disaster-stricken areas. It develops cooperation, coordination and partnerships with organizations that have similar advocacy such as the United Nations Foundation, Telecoms Sans Frontieres, and the World Food Programme. It also coordinates with humanitarian agencies and provides direct contribution which will be used to respond to critical humanitarian crises.

Lately, a programme called “Vodafone Red Alert” has been initiated. This forges “partnership between Vodafone Foundations and Vodafone Companies to engage Vodafone employees and customers in giving following emergencies and disasters” (vodafone.com, Global focus: Disaster relief).

a.2 Mobiles for good

The Vodafone foundation provides funds for projects that utilize mobile communication technologies to attend to some of the world's serious humanitarian challenges and improve the quality of life of the people. The essential activities of the programme include the following (vodafone.com, Mobiles for Good):

* to harness mobile technology to meet pressing global development and humanitarian challenges

* to facilitate innovation in the field of mobile health (mHealth)

* to disseminate studies recommending how mobile technology can effectively address some of the world's toughest challenges.

The foundation has initiated partnership with other organizations like datadyne, a humanitarian NGO, so that digital health data surveillance system operating on mobile devices will be established; and Mhealth Alliance, an umbrella organization that “complements, draws together and expands upon the mHealth initiatives of multiple organizations around the world” (vodafone.com, Mobiles for Good).

a.3 World of difference

The World of Difference (WoD) is an innovative charitable volunteering initiative currently being delivered across the international network of Vodafone Foundations. It is based on the principle “that individuals and community organisations should identify what they feel passionate about and then be provided with the resources to make changes happen” (vodafone.com, Global focus: World of difference).

a.4 Local foundations

There are 27 local Vodafone Foundations that are located in various parts of the world. Each foundation develops social investment programmes that address the unique needs of the communities and countries they are operating in. Through these foundations, Vodafone is proud about the concrete contributions and the significant difference they create in people's lives (Vodafone.com, Local Foundation).

B. Etisalat

Bin Ali, manager of public relations for Etisalat, encapsulates the stand of the company on Corporate Social Responsibility when he said: “Companies with CSR programs are companies that exhibit good management; are successful, well-run companies that have a forward-thinking management style. They increase employee job satisfaction and they build a strong reputation for the company” (ameinfo.com, 2005a).

Etisalat has been active in many of CSR endeavors either as a sponsor or supporter. In 2005, it sponsored a summit titled, “Corporate Social Responsibility” in order to examine ethical business models (ameinfo.com, 2005b).

Etisalat is also a regular participant in the Arab Corporate Environmental Responsibility Summit. In that summit, Bin Ali presented the different sponsorship on cultural and educational events. Etisalat was also the primary sponsor of Clean the World Campaign (etisalat.ae, 2007:Press Release).

In Egypt, Etisalat initiated a program that addresses Egypt's dilemma in water. The program is named “Origin.” This is in collaboration with international organization, “Care”, as well as well known governmental organizations like “Resala” (ameinfo.com, 2009:Press Release).

In 2008, Bin Ali, in attending CSR yearly summit, said: “Etisalat is determined to offer continuous support to people with special needs by helping them to communicate with family, friends, social centers, government organizations, universities, and many other organizations” (arabianbusiness.com, 2008:Press Release).

IV. Environmental Sustainability Projects

A. Vodafone

The company highly recognizes that at every stage of lifecycle of the phones and the network that connects them, there are enormous environmental impacts that must be taken care of, be it from manufacturing to use and disposal. It is the aim of the company to reduce or minimize these impacts where it has full control of the situation. At other stages where the company has no direct control, it encourages others to contribute in the reduction of environmental impacts.

As an initial step, Vodafone commissioned a research activity. The result highlights four elements in mobile phone life cycle that carry the highest environmental burden. These include extracting raw materials, manufacturing phone components, running networks, and managing the end-of-use of phones and network equipment. Among these, Vodafone only has significant control over the running of its network, and it contributes in reducing environmental impact by increasing the efficiency of energy utilization and recycling network equipment (vodafone.com, Environmental Impact).

There are a number of programs that the company is implementing to address environmental issues. Some of these are e-waste program and eco-consumerism. The eco-consumerism includes handset recycling, fewer upgrades, universal charger, solar charger, M2M, videoconferencing, home working, and e-billing. Briefly, handset recycling is a scheme that encourages users to return their old phones and accessories.

B. Etisalat

Etisalat is not alien when it comes to creating programs and schemes that would contribute in the preservation and protection of the environment. Recently, it launched an environment-friendly solution called ‘Pay and Win'. The primary objective of this is to create awareness about the environmental benefits of using online transactions, particularly in paying bills and mobile credit recharge and renew. The major benefits of this scheme is that it minimizes the use of paper, leading to paperless transactions, and reduces carbon emission since customers are no longer required to visit Etisalat business centers. Moreover, it reduces transport cost on the part of the customers (etisalat.ae, Press releases, March 2010).

Another programme of Etisalat to sustain its efforts on environmental protection and preservation is the recycling of mobile phones. In 2007, Etisalat opened “mobile phone recycling collection points at its business center across UAE” (ameinfo.com, 2007). The program encourages costumers to surrender their old mobile phones for proper and safe disposal.

More recently, Etisalat participated in celebrating the Earth Hour in all seven UAE Emirates (eyeofdubai.com, Press Release, March 2010).

V. Human Resources Polices and Relationship with Labor Union

A. Vodafone

Vodafone believes in people. It recognizes early on that the success of the business fundamentally hinges on happy, vibrant and motivated employees. Its policies on human resources are all-embracing that include health, safety and well-being; equal opportunities and diversity; training and development; reward and recognition; employee volunteering; and human rights and labor union. Employee volunteering will be discussed in social responsibility section.

a.1 Health, safety and well-being

Vodafone is a caring business institution. The health, safety and well-being of its employees are of optimum consideration as far as Vodafone is concerned. The company believes that all incidents and injuries can be averted, and it is the enduring commitment of the company for employees to function in a safe and healthy environment. Moreover, it recognizes that healthy and reliable workforce, moored on employee well-being, is the key to the company's success (Vodafone.com, Health, Safety and Well-being).

The well-being framework outlines various issues that affect or ensures employee well-being if they are attended to regularly. The company understands that work-life balance is important. In similar manner, healthy lifestyle is part of the advocacy of the company (Vodafone.com, Employee well-being).

Health and safety management systems, which anchor on the health and safety policy of the company, are well in place. Each operating company is enjoined to “develop, implement and continuously review its health and safety management system, consistent with local operating conditions and legislation” (Vodafone.com, Health and Safety Management Systems). In doing so, the company makes health, safety and well-being of its employees as an integral part of its business, consequently insulating the company from any legal intricacies by applying national laws.

a.2 Equal opportunities and diversity

Vodafone does not fear diversity. On the contrary, it accepts this as an asset in the business. Diversity enables the company to understand various personalities, cultures and experiences. This knowledge is then used in serving well its customers around the world. The practice of discrimination or unfair treatment is prohibited in whatever reason. Employee integrity is highly valued and respect for colleagues and customers is consistently observed. There is no better way of expressing the commitment of the company except by quoting it. It said: “Vodafone aims to create a working culture that respects the value of differences among colleagues and encourages individuals to contribute their best within an environment that is inclusive, open, flexible and fair” (vodafone.com, Equal Opportunities and Diversity).

The company recognizes gender and cultural diversity as areas that need continuous improvement. Vodafone understands the contribution of women in the business. In addition, the company fully feels that women are more sensitive and affected by family commitment than men. Thus, it engenders flexible working to help employees attend to their family commitments without sacrificing their time in the company. Recruitment consultants are required to recommend at least one competent female candidate to be considered in management-level positions. International job rotations are also practiced to give opportunities to employees to learn different cultures.

Employees with disabilities are not discriminated in whatever undertaking the company has, be it in recruitment, promotion or access to facilities and services. Disabled applicants are guaranteed fair and equal consideration in all vacancies they are willing to apply for. When hired, their needs are accommodated liberally and modification to workplace is done to make them comfortable.

a.3 Training and development

Growth and development are supported through training and education. Employees are encouraged to participate in training and undergo continuing education to acquire new skills and gain additional knowledge. A global programme called ‘Inspire' serves as an avenue to “identify and develop high potential employees and accelerate their progression into leadership roles” (vodafone.com, Training and Development).

Career opportunities are also promoted. Whenever possible, promotion or recruitment from within is observed to allow employees down the ladder to move upward. To do this, the company advertises vacancies in its global intranet. This ensures exchange of talent internationally.

a.4 Reward and recognition

Reward and recognition have an intrinsic objective of giving added motivation for employees to stay on and work productively. Reward and recognition further make them feel important and useful owing to the acceptance of their efforts. Vodafone understands this, and it rewards employees based on their output and performance, potential and contribution to the success of the business. The company also offers competitive and fair salaries and benefits so that employees will be discouraged to transfer to other companies. Retirement benefits are also given in various schemes (vodafone.com, Reward and Recognition).

a.5 Human rights and trade unions

As an international business entity, it recognizes all human rights legislations, regulations and standards peculiar to the countries where it does its business. Vodafone primarily is committed to protecting, upholding and enhancing the human rights of its employees. It is interesting to note that the company's employment policies adhere to the principles being upheld by the UN Universal Declaration of Human Rights and the International Labour Organization Core Convention (vodafone.com, Human Rights).

The company further acknowledges the rights of employees to join trade unions or related organizations outside the company. Where legislations allow it and the majority of employees permit a trade union to negotiate on behalf of them, the company automatically recognizes this. Lastly, the company shows sincere manifestation of goodwill by encouraging recognized trade unions to work in constructive partnership, taking into consideration the best interests of employees, shareholders and customers.

Vodafone likewise abhors child labour and forced or compulsory labour. Its employment policies also include health and safety, as well as equal opportunities and diversity, which will be expounded in the succeeding sections.

B. Etisalat

b.1 ISO certification

There is one thing that Etisalat is definitely proud of, i.e., its human resource (HR) systems has earned ISO:9001-2000 certification (ameinfo.com, 2004). As reported, Etisalat's HRD marked another important event in its professional development when it successfully obtained certification from an internationally-recognized agency. In that report, Al Sawaleh, the Executive Vice President - HR of Etisalat, recognizes its employees to be the most valuable asset. He further added: “In the new competitive and global market we are poised to enter, it is critical that our employees have the ability to do their work in the most effective manner possible. We also want to give them every opportunity to improve themselves in a progressive and healthy work environment” (ameinfo.com, 2004:Press Release).

b.2 Emiratisation

Months prior to the certification, a major award was received by Etisalat Human Resources. The award was about the adherence of Etisalat to the nationalization program of the government. This is commonly called Emiratisation. It was given by GCC Council of Ministers of Labour and Social Affairs in recognition of Etisalat's “unprecedented success in the implementation of recruiting policies and training programs that have proved immensely successful for both its employees and the corporation” (ameinfo.com, 2004:Press Release).

b.3 Labor union

There is immense restriction on the establishment of labor unions. The law does not allow workers to indulge in collective bargaining, although it authorizes work dispute settlement. However, it should be noted that UAE workers are one of the highest paid in the region, and in the world. Handsome benefits such as housing, travel allowances, training and education with pay, and others are provided. The company's top management made up with a compassionate partriarchal type of leadership what the law does not provide.

VI. Conclusion

At the very outset, it has been observed that Vodafone has a very extensive and encompassing literature on ethics. Its commitment is not only done rhetorically, but systems and structures are already in place to make ethics work in the company. Vodafone has a policy on whistle-blowing and on Duty to Report, which oblige employees to report suspected irregularities. These are just some of the institutionalized policies that have corresponding systems and structure that allow them to be implemented smoothly. However, policies are derived from existing laws and legislations where the company operates. In general, we observe that Vodafone is more liberal and democratic.

Etisalat too has its own unique policies, which are anchored on existing laws and regulations in UAE. For instance, its government discourages or totally does not allow labor union. Etisalat abides by what the government says; thus, it does not allow labor union in the company. Government restricts destructive press releases or articles that undermine the credibility of the Emirate, and censorship is not prohibited when the government agencies think that allowable bounds have been broken. This allows Etisalat to ban internet sites that are found detrimental to the social and ethical fabrics of society, but which are considered harmless in other countries.

Looking at ethical practices in light with these two areas, censorship and labor union, we can say that Vodafone's employees are not prone to abuse because they have the labor union to assist them. This is an opposite of what is happening when labor unions are absent. Employees tend to be exploited. Censorship is also susceptible to abuses, especially when there is no clear delineation between what is acceptable or not.

UAE can always look back on the current policies that the government is strictly implementing. When the time is ripe, some of these policies may undergo modification or may be expunged completely.

Part II

I. Ethical Misfortune

One of the most compelling issues that must be considered when we talk about the communications industry is privacy. Some cultures hold privacy so dearly that it is considered to be inviolable, while other cultures are more tolerant. Since most of the customers of Vodafone and Etisalat are multicultural, they must become sensitive on the demand for privacy of each customer.

In the report (Bevir, 2009), Etisalat has been accused of deliberately installing Java-based software/patch, which is categorized as spyware, in BlackBerry handsets of its customers. This was followed up by another report (Reilly, 2009a) demanding Etisalat to answer the accusation hurled against it.

According to Etisalat, the patch was supposed to help in network improvement. But later, it was found to be “a highly sophisticated piece of spyware, the purpose of which was to circumvent state-of-the-art encryption and security systems in order to send private emails to a third party server” (Reilly, 2009b). This compromised the privacy of Etisalat's customers.

The reaction of Etisalat on the issue is more of indifference. This kind of reaction would allow the issue to die down naturally, particularly when more controversial news come to fore.

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