Hyundai Motor Companys global performance with regards to fulfilling its corporate social responsibility - Essay Example

?Hyundai Vehicle Company (COLLEGE/ Introduction Modern society is highly concerned about environmental sustainability more than ever before. Consumers today tend to discourage businesses which are likely to cause toxic emissions or other forms of pollution. While analyzing the industrial world, it seems that majority of the organizations raises some sorts of challenges to ecological balance. For a multinational corporation like Hyundai Motor Company, the world’s fourth largest automobile manufacturer, the potential for environmental damage is higher. Since combustion of fossil fuels constitutes a huge portion of greenhouse gas emissions, modern consumers are increasingly switching their demand to eco-friendly vehicles. Therefore, the Hyundai Motor Company gives great emphasis on design and development of eco-friendly vehicles. Currently, the company is rapidly moving towards “its target of global automotive leadership in environmentally-sensitive technologies”1. This paper will critically analyze Hyundai Motor Company’s global performance with regards to fulfilling its corporate social responsibility. Positive sides of Hyundai Motor Company The most noticeable achievement of Hyundai is that the company could markedly reduce CO2 emissions on the strength of technological innovations. According to Environmental Protection Agency (EPA) 2011 Trends Report, Hyundai Motor America was ranked as the top automobile manufacturer in terms of fuel efficiency and CO2 emissions2. Through its quality innovations, Hyundai developed green cars that are capable of reducing CO2 emissions and thereby promoting environmental sustainability. Reports indicate that such innovations assisted Hyundai to lower the CO2 emission volumes of its new models including i10, i20, and i30 blue to the range of 100g/km.3 New developments in Hyundai’s technological sector indicate that the firm has the potential to minimize greenhouse gas emissions. Although Hyundai contributes less volume to CO2 emissions as compared to other world’s leading automobile manufactures, the organization is still accounted for a notable percent of total global emissions. In the field of corporate social responsibility, the company has obtained several achievements across its various market segments, especially in emerging economies like China and India. To illustrate, Hyundai Motor’s Chinese subsidiary won the ‘2011 Most Responsible Corporate Citizen’ award for the firm’s efforts in various social welfare fields. The Hyundai greatly supports the Chinese government in poverty reduction, traffic safety, sand prevention and control, and several other areas4. It is estimated that the company’s investments in the field of environmental sustainability in China would reach nearly 4.1 trillion and those investments may account for clean diesel vehicles, electric vehicles, and Blue Drive development plan5. In India, the Hyundai Motor India Foundation (HMIF) has made investments worth more than 20 million rupees in different social welfare programs6. The organization has begun its “Go Green” village based project in Tamil Nadu (an Indian State) in 2011 with intent to improve living standards of the region’s villages7. Considering the Hyundai’s contributions to the State, the company has been given the ‘Corporate Social Responsibility Award’ and ‘Best Commercial and Industrial Institution’ award by the Tamil Nadu State government8. According to Biwalkar, the Brand Trust Report study conducted in India in 2011, Hyundai was selected as the country’s 43rd most trusted brand9. Hyundai’s corporate responsibility programs benefit Chinese and Indian societies. To illustrate, these economies are still at developing phase and therefore they struggle to meet increasing infrastructure facilities and other living condition requirements arising out of a high level population growth. Evidently, the emerging economies greatly support Hyundai’s business and arrange improved operational facilities for the company10. Hyundai Motor Company offers an array of services to its home country South Korea. The company has extended its services to the country’s different sectors including healthcare, education, transportation, infrastructure, and other productive areas. Hyundai encourages the manufacture of eco-friendly products in the country. In addition, the organization has designed financial packages for the uplift of low income groups in the country. Recently, Hyundai Motor Company’s CEO and Chairman Chung Mong-Koo announced an extensive social welfare plan in order to support Korea’s underprivileged students with medical, educational, and financial assistance by way of personal donations11. According to Yon-Se, The company officials believe that this package would benefit approximately 84,000 students over the first phase of five years12. In addition, the company runs some charitable institutions in the country including Hyundai Motor Chung Mong-Koo Foundation. The Hyundai’s large scale corporate responsibility programs have greatly assisted the organization to obtain great support from Korean government as well as general public. While analyzing the corporate responsibility policy of Hyundai Motor Company, it is obvious that the company focuses on social welfare and environment sustainability beyond its business interests. This attitude aided the company to be ranked as the world’s top corporate responsible automobile manufacturer and win a number of reputed awards. The corporate history of the Hyundai indicates that the firm’s increased focus on social responsibility has assisted them to effectively overcome various threatening market situations. For instance, the company could achieve a significant growth rate in the fiscal year 2010 despite the adverse impacts of the global financial crisis 2008-0913. Negative Sides of Hyundai Motor Company Although the company has been successful in designing and executing social welfare programs as compared to other automobile manufactures, it still contributes to environmental and other social issues. The explosive growth of Hyundai Motor Company over the last two decades seriously threatens the sustainability of domestic car manufacturers. To illustrate, Hyundai’s over dominance in the Chinese market has adversely affected the country’s domestic automobile manufacturers. According a survey, “China’s domestic auto manufacturers only account for 32 percent of market share, much less than their counterparts in Japan and South Korea, which occupy 94 percent and 73 percent in their domestic market”14. Hence, it is clear that domestic auto manufactures would fail to confront with stiff market competition if Hyundai continues to dominate foreign markets like China. Many other countries are also facing the same problem. Although the company’s dominance over foreign markets may benefit its shareholders, the situation would hurt the interests of many domestic players. Finally, Hyundai’s waste dumping activities have become a threat to environment in third world countries in Africa even though the organization has developed a number of effective waste recycling methods. Impacts of Company’s Actions on Stakeholders Evidently, there is a direct relationship between stakeholder interests and environmental sustainability, because sustainable environmental operations contribute to stakeholder values. The above sessions clearly indicate that the company is successful in the area of environmental management and in designing and executing other social welfare programs. Hence, the company’s actions provide its various stakeholders including shareholders, external investors, banks and other financial institutions, employees, and general public with a numerous direct as well as indirect benefits. To illustrate, development of eco-friendly vehicles and thereby reduction of CO2 emissions have greatly assisted the company to add value to the interests of different stakeholder groups. Increased greenhouse gas emissions would cause ozone layer depletion and this process would ultimately threaten the existence of human beings15. Hence, any effort toward the minimization of greenhouse gas emissions may contribute to social interests and thereby business success; and this situation in turn would serve the interests of different stakeholder groups, particularly shareholders. Since Hyundai makes huge social welfare investments in emerging economies like India and China, the firm will get access to those potential market segments. This feasibility may help the company to contribute to stakeholder values. In short, Hyundai’s social responsibility programs benefit the firm’s shareholders, employees, and the society as a whole. Conclusion Hyundai Motor Company maintains a set of well designed corporate responsibility policies. The success of the firm is attributed to the integration of its social responsibility programs with the business operations. The firm’s efficiency in social welfare programs aided Hyundai to effectively overcome various market crises. Hyundai’s corporate responsibility status assisted the organization to win a number of community awards from its core market territories. Hyundai can become the world’s top car manufacturer provided that the company strictly maintains its operational efficiency and social responsibility policies over the upcoming years. Bibliography Biwalkar, Meghana. “India’s 50 most trusted brands!.” Rediff Business. (2011). http://www.rediff.com/business/slide-show/slide-show-1-indias-50-most-trusted-brands/20110120.htm (accessed 21 March 2012). 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