Corporate Social Responsibilities (CSRs)

Introduction

Companies are concerned about the relation they maintain with their operating environment. Consumers have become enlightened; they are demanding a share of a company’s profits through corporate social responsibilities (CSRs) activities (Mitsubishi Corporate website 2010, b).

On the other hand, companies are finding it ethical to have CSRs programs in their corporate functions. CSRs are commitments that a company undertakes on behalf of the society. They take different forms like environmental conservation, education policies, health and roads construction among others. It is seen as a way of giving back to the society that has supported a business.

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Mitsubishi motor company is an international automobile company ranked number six in volume and sales in Japanese motor industry. In the world, the company is rank eleventh largest automobile company. The company was founded in 1870 by Yataro Iwasaki as a shipping company, it was then called Mitsubishi Shokai; it diversified into motor manufacturing industry in 1970.some of the company’s brands include Mitsubishi Lancer and Galant.

It manufactures both passenger and commercial vehicles. To maintain good relations with its stakeholders, the company have embarked on various social corporate responsibilities (Brown 2008). The company approach CSRs from an internal and external approach. Mitsubishi company has divided its social responsibility into three main areas; compliance, customer, and safety. To attain these broad categories of corporate social responsibilities, the company have embarked on various policies.

The case against Mitsubishi

In 2004, Mitsubishi Company had issues with the quality of various parts of its products. Mitsubishi Endeavour brand was the main brand in the period and proved unsatisfactory to the communities. The car failed the test of carbon emission per trouble code PO453: EVAP Control System Pressure Sensor: this made the emission from the product higher than the expected rate. These emissions lead to a condemnation of importation of the model in major European countries.

In the same year, the car was condemned of having vibrations and making unnecessary noise at a speed of only 30-40 mph. The comfort that the people and community wanted could not have been attained with such a noise; this was on top of batteries that were not dependable (Wisner, and Ira 1996). In the years 2007 to 2009, the company had the least satisfaction in a comparison of ten major motor companies in the world (Mitsubishi Motor Corporation 2010, c.).

The company has recalled a number of default vehicles in the United States and other parts of the world. For example in the United States, the company have recalled over 3000 cars in the wave called the eclipse saga (Gutman 2006). The company’s reputation was spoil. There was need to restore the trust and confidence of community in its products. The same model had a problem in electric engineering where it had electric shocks and reduced the reliability that people had on the vehicle.

The performance of the company in 2004 was-wanting, it did not satisfy its customers as it is expected. The defects of the vehicles lead to a population that is not satisfied with the company’s products. This led to reduction in sales and erosion of customer loyalty.

The case for Mitsubishi

In July 2008, the company made a commitment to the ministry of energy that it will check its emissions in the efforts to protect the environment. The company took an approach from internal process automation and creating efficiency to the programs that it embarked on in the society.

Internally the company has embarked on processes that reduce emissions from its production units. It has ensured that there is recycling of products and water. The company aims at developing good relations with its stakeholders and customers by ensuring it has upheld to ethical code of conduct and respects national and international business laws (Sun 2010).

In 2009, the company launched eco-cars also called i-MiEV, with the aim of protecting the environment. The car uses electric charging system, thus it will reduce over reliance with fossil fuel as its source of energy.

Carbon emission from the new model is also minimal; this minimizes air pollution. Communities at international and national level are concerned about global warming; the new invention is seen as a move to reduce the rate of global warming since it has minimal emission of green house gasses (Visser, Dirk, Manfred, and Nick 2007).

To see the dream of having a world with minimal carbon emission, the company has entered in strategic alliances with other interested parties. The alliance is called CHAdeMo, which is derived from the statement “move by changing”. Among the partners in the sector are motor manufacturing industries like Toyota Motor Company and Nissan, other players are charger-manufacturing companies.

The major approach that the company has taken as far as protection of the environment is concerned is automating and embarking on innovation to manufacture environmentally friendly cars, however, in the efforts to restore the already damaged environment, the company sponsors various tree planting and garbage collection exercises.

Volunteer employee with some support of the company manages and maintains “Pajero Forest” project. The project and families involved is responsible for maintaining three-hectare forestland located in Yamanashe preference; the project also educates people on the need to plant trees (Mullerat, and Daniel 2005).

The company’s vision 2020 on environmental conservation aims at reducing carbon emission from driving of its motor vehicles by 50% of the rate of emission that was experienced in 2000. This will be attained through adopting new technologies and innovating more ecological friendly motor cars. The electric motor production is expected to be on the rise where by 2020, the company aims at having 20% of its product being electric vehicles (Fraedrich, Charles, and Linda 2009).

All branches and sales point internal process pollution production is expected to have reduced by 20% by 2020.this will be attained by adopting better production methods and embracing the benefits of recycling. Before then, the company is developing appropriate infrastructure. Other than environmental concerns in the company, the company have other CSRs. They include;

The company have a program called “Support the next generation”, this program is targets at creating interest in children and building a culture of traffic safety at an early ages. There is a toll free number that children can call and ask about any issue they want to know about motor.

It also visits schools to interact with children. The company sponsors a program of making children books that can be used for learning traffic and motorcar developments. It also accepts learning tours in the company where in 2009; the company experienced 38,000 visitors.

The company has a program called STEP program; the program sponsors certain projects within the society. In 2010, among the recipients of the program were children sponsorship (NPO world vision) and children forest program (OISCA).

The company have a program called “eco-minded initiative” which have conducts and annual exercise of collecting old books , materials, post cards, CDs and DVDs then sell them to and the money gotten used to sponsor Sutenal Seikatsu and child’s dream fund program (Mitsubishi Motor Corporation 2010, c)

Social corporate responsibilities create a better understanding and relation between a company and the community. Mitsubishi has created better working condition that made the company go through global financial crisis of 2007 successfully (Pernille 2000).

Sales in the United States, Japan, Asia and Europe reduced between 2004 and 2010, however there is hope that the trend will be reversed as the world recovers and realizes the need for eco-friendly cars. In 2009, the company was able to recover from an operating loss suffered in 2008 of 54,883 million Yens to make a profit of 4,758 million Yens (Mitsubishi Motor Corporation 2010, a).

The company efforts in maintaining good relations with the customers is bearing fruits since there is an increased customer satisfaction and customer loyalty. Customer needs are met and the close interaction has assisted the company understand what the people want in the society.

Concluding remarks

Companies are more concerned with the relationship they maintain with their customers. Despite having problems in 2004, Mitsubishi Company has embarked on corporate social responsibility programs in an effort to restore and maintain good relations with its customers. In 2004, the company’s supply chain management allowed some defective raw materials to find their way in the company leading to low quality products. The approach taken by the company targets both internal (production processes) and external (products) processes.

To restore and conserve the environment, the company has embarked on massive public education in the need to conserve the environment. Internally it has embraced technological development and innovations to produce fuel-efficient cars and eco-friendly cars. Despite the efforts taken by the company, it is still dragging in the level of customer satisfaction. It needs to have a macro approach to environmental conservation measures (MacLeod, Lawrence, Michael , and Terry 1999).

Recommendations on areas of improvement

The company can be applauded for the efforts that it has taken in conserving the environment and ensuring communities’ safety is enhanced. However, there is more that the company can do. So far, the electric vehicles that have been produced are small private passenger’s cars.

There have been no moves to expand the technology to commercial vehicles; this means that there still is carbon emission from its products. The products although are readily available in the market, their accessibility is limited to Japanese and some American and European markets.

There has been no effort to have the products in developing countries. If the current concerns of global warming are to be won, then companies are not supposed to limit their effort in one country rather they are supposed to look for international solutions (Gyorgy, and Gyorgy 2006).

The company should analyze reports on the level of satisfaction that its customers derive from its products; compare it to other companies in the same industry and make strategic changes were necessary. This should be the starting point in implementing policies that directly target certain problems (Wheeler, and Maria 1997).

The company’s quality assurance team should be more robust in their duties. Almost on yearly bases, there are defects in the company’s products making the customer un-satisfaction. The problems range from brake failures crushes defects, tires, gear systems and electric system among others. The problem can be traced in supply chain management operated by the firm that do not guarantee quality products in the firm (Michael 2009).

Reference list

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Fraedrich, John, Charles Ferrell, and Linda Ferrell .2009. Business Ethics: Ethical Decision Making and Cases. New Jersey: Cengage Learning.

Gutman, Howard.2006. Mitsubishi Transmission Problems. FREE INITIAL CONSULTATION. Online. Available from internet, http://www.lemonlawclaims.com/mitsubishi_transmission_problems.htm ,accessed 04 January 2011.

Gyorgy, Szell,and Gyorgy Szell. 2006. Corporate social responsibility in the EU & Japan. Indiana: Peter Lang.

MacLeod, Mary D., Jr., Lawrence L. Garber, Michael J. Dotson, and Terry M. Chambers. 1999. “The Use of Promotional Tools in the Motor Carrier Industry: An Exploratory Study.” Transportation Journal 38, no. 3: 42.

Michael, Brian. 2009. “Comparing Motor Technologies.” Air Conditioning Heating & Refrigeration News 238, no. 15: 18.

Mitsubishi Motor Corporation.2010,a.Financial Statement Summary. Online. Available from internet, http://www.mitsubishi-motors.com/en/corporate/ir/library/pdf/actual_annual_summary.pdf, accessed 04 January 2011.

Mitsubishi Corporate website.2010,b. Mitsubishi. Online. Available from internet, http://www.mitsubishi-motors.com/ ,accessed 04 January 2011.

Mitsubishi Motor Corporation.2010, c. Social and environmental report 2010. Online. Available from internet, http://www.mitsubishi-motors.com/en/corporate/social/pdf/2010e_all.pdf, accessed 04 January 2011.

Morley, Elliot.2010. Low carbon technologies in a green economy: fourth report of session 2009-10, Vol. 1: Report, together with formal minutes, Volume 1.London: The Stationery Office.

Mullerat, Ramon, and Daniel Brennan.2005. Corporate social responsibility: the corporate governance of the 21st century. New York: Kluwer Law International.

Pernille, Rudlin.2000. The history of Mitsubishi Corporation in London: 1915 to present day. London: Routledge.

Sun, William.2010. How to Govern Corporations So They Serve the Public Good: A Theory of Corporate Governance Emergence. New York: Edwin Mellen

Visser, Wayne, Dirk Matten, Manfred Pohl, and Nick Tolhurst. 2007. The A to Z of Corporate Social Responsibility. London, England. New York: Wiley.

Wheeler, David, and Maria Sillanpaa.1997. The Stakeholder Corporation: a blueprint for maximizing stakeholder value. London: Pitman.

Wisner, Joel D., and Ira A. Lewis. 1996. “Quality Improvement Programs in the Motor Carrier Industry.” Transportation Journal 36, no. 2: 26.

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