Corporate Social Responsibility - The Vodafone Way

Email this Share This

Share This Page

Facebook Twitter reddit Google Bookmarks del.icio.us StumbleUpon Newsvine livejournal Mixx it!

Print This Comments (9) http://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=169047

Prev Next

A GNA Feature by Samuel Dowuona Accra, Sept. 21, GNA - In the heat of the suspended Vodafone employee retrenchment exercise, the management gave a number of reasons why the exercise is necessary, one of which is to set the tone for things to be done "The Vodafone Way" at the former Ghana Telecom. Even though downsizing was part of the controversial Sales and Purchase Agreement (SPA) signed by the former government led by President John Agyekum Kufuor and Vodafone PLC, the way management went about it has aroused some resistance from stakeholders - the local and national labour unions and the minority shareholder, government. Interventions by an inter-ministerial team drawn from the ministries of Communications and of Employment and Social Welfare; and a tripartite meeting between union leaders, management of Vodafone and the employment ministry, failed to yield amicable results until finally the National Labour Commission (NLC), upon the petition of the workers' union, called for the suspension of the exercise until further notice. But, for what it is worth, it is only fair that after investing over a billion dollars in a sinking entity like Ghana Telecom, while competition is making huge gains, the investor, Vodafone, would want things to be done "The Vodafone Way".

If there was a better way than "The Vodafone Way", prior to the coming of Vodafone, the company would not have recorded a loss of GH264 million last year. Major Albert Don-Chebe (Rtd), Head of Corporate Communications at Vodafone, told the GNA that another loss was expected at the end of this year, "but that will be the end of losses". Vodafone has set a two-year target to turn the fortunes of the company around and make it productive and profitable, and that, in their judgement, can only be possible if things are done "The Vodafone Way". But "The Vodafone Way" is not only about productivity and profitability; it is also about touching communities and making a difference in the lives of people, says Don-Chebe. This is in spite of the argument that most of the 942 workers, who exited voluntarily, and the further 950 earmarked for compulsory exit, would eventually be a scar on "The Vodafone Way" since not all of them can sustain their lives after Vodafone, no matter how much Vodafone tries to help them to. Coming into this country, Vodafone bought 70 per cent shares in Ghana Telecom for US$900 million amidst passionate public criticism. Indeed, some prominent citizens took the previous government to court on the sale of the national asset. The current government, which led the criticism of the sale when in opposition, instituted an inter-ministerial review of the whole SPA to determine whether it was done in the best interest of the public, even though the previous Parliament approved the SPA. The Minister of Communications last month took delivery of the 67-page report of the fivemember inter-ministerial review committee and promised that government's next line of action will ultimately be in the strategic interest of the public. But Vodafone is not waiting for the government; it has since invested at least US$120 million into the third generation (3G) technology and expansion of 2G GSM technology, bringing its total investment so far to over US$1.0 billion. Even though the company reported a US$264 million loss last year, they have started making social interventions across the country to indicate to Ghanaians that they are not only here to make and export profits but to share the gains with the Ghanaian public in ways that would impact individual lives. "At Vodafone, we believe that our company's future is inextricably linked to the quality of our connections to community and social causes. This is why we apply our competencies and energies to the empowerment of communities where we operate," says Vodafone on its website, www.vodafone.com.gh. The company says they do corporate social responsibility (CSR) because they want to and not because they have to, adding that because their people have been resourced and empowered to share this belief, every level and sector of their business continuously strives to do what is right by their customers, community and environment. Indeed, at his first encounter with the Ghanaian media, Vodafone Ghana CEO, Mr David Venn, declared that CSR was his passion and that as far as he was concerned , CSR was part and parcel of the core business of Vodafone. Mr Venn therefore assured that, like in all the other core business areas, "Vodafone will set

the pace in CSR too for our competitors to follow." For one, Vodafone recently launched the biggest single subscriber reward promotion dubbed "Vodafone Rewards", which seeks to reward an individual subscriber with a package worth US$1.00 million at the close of the promotion period, plus several other juicy rewards to subscribers during the promotion period. The total value of the Vodafone Rewards Promotion is about US$2.2 million. The company was also the first to introduce a promotion dubbed "Stock Big, Grow Big, Win Big" intended to reward retailers for stocking and selling Vodafone products. That promotion is worth GH1.0 million with the prizes component alone worth GH435,000, says Ekow Blankson, Trading Marketing Manager at Vodafone Ghana. It seems Mr Venn, or Vodafone for that matter, is putting his money where his mouth is, with all the promotions and CSR activities either already accomplished or underway, less than two years Vodafone landed in the country. Vodafone's CSR activities have focused on education, culture and communities. Education In education, Vodafone has contributed close to GH30,000 to a number of educational funds of traditional councils across Ghana. They include Asogli State, Ga Traditional Council, Essikado Traditional Council, New Juaben Traditional Area, Otumfuo Educational Fund, Dakpema Educational Fund, and Bolga Traditional Council. "We have done this because we believe that social circumstance should not be a barrier to education. Our support will give brilliant but needy students a chance to also go to school," says Maj. Don-Chebe. Additionally, four public universities have received multi-purpose industrial printers, each valued at GH300,000 to enable them to better resource reprographic (photocopying) centres. Again, at the All Nations University at Koforidua in the Eastern Region, Vodafone has sponsored an award for the Best Electrical Engineering Student. Through its community assistance programme, the company has also helped light up the streets of Kwame Nkrumah University of Science and Technology (KNUST) under a street lighting project valued at GH50,000. Vodafone has also donated GH10,000 to the Princess Umulhatiyya Foundation to help build a primary school for the people of Tootlingli, a village near Tamale in the Northern Region. Culture In the area of culture, Vodafone has shown that they understand that culture is intrinsic to the Ghanaian and that was why they partnered the Royal Ashanti Kingdom with a sum GH60,000 to celebrate 10 years of Otumfuo Osei Tutu II's reign. The company also supported the Akwantukese festival of the Chiefs and people of New Juaben in the Eastern Region with the sum of GH2,500. Communities

Vodafone intends for communities to identify with and benefit from their core business. The company continues to push this agenda by providing fixed wireless community phone booths, where local residents can make moderately priced phone calls to enable them to keep in touch with friends and family. So far, the company has mounted 400 phone booths in selected schools and communities across the country. Vodafone has also given out as many as 110,500 simcards for free to people in the communities and schools where booths are located to encourage them to patronise the facility. Communities which benefited from the first phase of the phone booth programme include Sumbrungu in the Upper East Region; Fufulso in the Northern Region; Adawso in the Eastern Region; Afrisipakrom in the Brong-Ahafo Region and Sefwi Dwenase in the Western Region. In the early days of Vodafone's entry into the country, it announced some Vodafone UK Foundation commitment to projects in parts of Africa, including Ghana. But sooner than later, a local version of Vodafone Foundation will be launched in Ghana. The foundation will be one more avenue for Vodafone to undertake more sustainable CSR projects. The foundation will develop programmes of social impact mitigation, utilizing mobile communications technology, network with relevant NGOs and support activities that are aimed at protecting the natural environment. It will also develop and implement social investment plans including creating opportunities for employment and training, business development partnership for community development and finally encourage Vodafone employees to volunteer in providing paid time service in sustainable community projects. If Mr Venn's promise to set the pace for others to follow in the area of CSR is anything to go by, then Ghanaians can put their hope in "The Vodafone Way". For one, the Vodafone Group fact sheet states that Vodafone Foundation is currently worth a A3100 million, and that is huge. Ghana can do with just five per cent of that in CSR projects per annum. "The Vodafone Way" promises a pace that if the other operators follow, Ghanaians stand to benefit a great deal from the telecom industry that is making a total of about US$1.00 billion dollars a year in average revenue per user (ARPU).

: Corporate social responsibility (CSR) has been defined as the commitment of business to contribute to sustainable economic development working with employees, their families, the local community, and society at large to improve their quality of life, in ways that are both good for business and good for development. To meet with the CSR it is expected that a business in its entire procurement-production-processing-marketing chain should focus on human development involving the producer, the worker, the supplier, the consumer, the civil society, and the environment. Indeed, a very tough task. Most businesses would certainly flounder in not being able to achieve at least one or many of those expectations. But AMUL has shown the way. CSR-sensitive Organisational Structure AMUL is a three tier co-operative organisation. The first tier is the co-operative society at the village,of which; milk producers are voluntary members, managing the co-operative through a democratically elected 9-member managing committee, and doing business by purchasing milk from members and selling it to the district level cooperative. There are more than 11,000 co-operatives in villages of Gujarat. The second tier is the district co-operative that processes milk into milk products, markets locally and sells surplus to the state co-operative for national and international marketing. There are 12 district co-operatives each being managed by a 15-member board elected by the college comprising the nominated representatives or chairmen of the village co-operatives. Third tier is the state level co-operative - the Gujarat Co-operative Milk Marketing Federation (GCMMF) responsible for national and international marketing of milk and milk products produced and sold to it. The GCMMF is managed by the board democratically elected by and from amongst the chairmen of the district cooperatives. The entire three-tier structure with the GCMMF at its apex, is a unique institution because it encompasses the entire chain from production of raw material to reaching the consumer with the end product. Every function involves human intervention: 23.60 lakh primary milk producers; 35,000 rural workmen in more than 11,400 village societies; 12,000 workers in 15 dairy pla-nts; 750 marketing professionals; 10,500 salesmen in distribution network and 600,000 sal-esmen in retail network. Accu-mulation of human capital is sine qua non for the development and growth of any enterprise or economy. The GCMMF is sensitive towards CSR. It believes that technology and capital are replicable inputs but not the human capital. Since men are the basis for achieving the CSR, the GCMMF lays emp-hasis on their development into competent, courteous, credible, reliable, responsive communicators and performers. CSR-sensitive Business Philosophy The first step towards discharging the CSR is the business philosophy of the GCMMF. It is two-fold: one, to serve the interests of milk producers and second, to provide quality products to consumers as value for money. Evolution of an organisational system has ensured that the corporate social responsibility towards the primary milk producers, village and the ecological balance is fulfilled. The milk producers are paid for their milk in accordance with market forces and realisation of value for their produce. Invariably the price paid to the memberproducers in Gujarat is higher by 15 per cent than the national average. CSR-orientation To Distributors & Retailers The GCMMF has identified the distributors and retailers are its important link in its vendor supply chain. Through surveys the GCMMF found that 90% of the distributors do not get any opportunity of exposure to latest management practices. The GCMMF realised that it was a corporate social responsibility to strengthen the core business processes of its distributors so as to keep them in mainstream business and compete with those with formal training in management. The GCMMF has developed and trained all its distributors through ValueMission-Strategy Workshops, competence building, Amul Yatra, Amul Quality Circle meetings, computerisation, and electronic commerce activities. Competency Building Module of the GCMMF is meant to infuse professional selling skills by making the distributors and their salesmen aware of latest sales management tools and techniques; enhance their knowledge of products; positioning and segmentation strategies for various products. Under Amul Yatra the distributors and their salesmen are taken on a visit to Anand. During this visit they are shown dairy plants, their upkeep, international standards of hygiene and quality; the practices adopted for clean milk production, and above all the cooperative philosophy. Through one to one talk with the farmers, the distributors and salesmen realise AMUL is a large business of small farmers. The visit leaves an everlasting impression on their minds that

by selling AMUL products, they are discharging a social responsibility towards a large number of poor farmers whose livelihood depends upon their skill and integrity. They feel proud that they are participants in development of rural society and thus in nation building. Earnings Of GCMMF Nurturing its primary members - the milk producers - is the first mission of the GCMMF. Discharge of this responsibility is reflected in the manner in which the GCMMF conducts its business and shares its earnings. The milk from the village co-operatives is purchased at an interim price. So as to maximise the earnings of the milk producers the GCMMF changes the product profile during the fiscal and directs its sales and marketing activities towards those products that would bring in maximum returns. True! Every business organisation follows the same principle. But the GCMMF follows it with the central interest of the producers. During the fiscal, as the GCMMF finds that from its earnings it is possible to pay more to the producers for milk, the final price is declared higher than the interim price being paid. Before the GCMMF closes its financial accounts the co-operatives are paid price difference, the amount between the interim price and the final price. Thus profit of the GCMMF is very low. The net profit (PADT) of the GCMMF during 2003-04 was Rs 7.31 crore against a turnover of Rs 2,947 crore, a meagre 0.25%. Further out of the net profit of Rs 7.31 crore, Rs 4 crore was given as share dividend to the cooperatives. To fulfill its corporate social responsibility towards its milk producers and co-operatives the GCMMF works on razor thin profits and retention of funds. CSR-oriented To Staff The GCMMF hires and trains people to take advantage over its competitors. It has developed in-house modules for training and competence buil-ding to improve and up grade of their knowledge; communication skills to understand the customer, be responsive to customer requirements, and communicate clearly for trouble shooting of problems. They are expected to be courteous, frie-ndly, respectful, and considerate to the customer. To improve the credibility and trustworthiness of the managers it is important they perform consistently and accurately every time and at all times. The structure of salary and perquisites is altogether different. The first and foremost the staff must get satisfaction from the job they. They are recognised for their contribution (Climate Survey) CSR-AMUL WAY

Type Cooperative Founded 1946 Headquarters Anand, India Key people Chairman, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF) Industry Dairy Products Listing of product is given below Revenue Template:Revenue$1 billion USD (in 2006-07) Employees 2.41 million milk producers

Website www.amul.com

AMUL RELIEF TRUST A devastating earthquake (Richter scale 7.9) hit Gujarat on 26th January 2001. The epicenter of the quake was located in Kutch district. It caused death of thousands of people, tens of thousands were injured, hundreds of thousands were rendered homeless and damage of billions of Rupees was done. GCMMF formed a specific organization named Amul Relief Trust (ART) under the Chairmanship of Dr. V. Kurien in 2001 with a donation of Rs. 50 Millions for reconstruction of the school buildings damaged in the 2001 earthquake in the Kutch area. The Trust reconstructed 6 schools damaged by the above earthquake at a cost of Rs. 41.1 millions in Kutch area. Four of these schools started re-functioning from the last two academic sessions and the other two schools from the current session.