1.What drives the company to translate its ethical beliefs into ethical actions?

Vodafone has grown rapidly since it was originally formed in 1984. It has
responsibilities to its 60,000 staff and 151 million customers and shareholders.
It also believes it has a responsibility to society. The company aims to continue
to grow. Economies of scale improve efficiencies, enhancing the company's
performance. This increases returns to shareholders and makes money available
to improve services to customers. In order to grow, Vodafone must attract new
customers and retain those it currently has. Serving customers well relies on the
ability to attract and retain good quality staff. Both these stakeholder groups
care about the company's ethics.
Vodafone has carried out extensive research which confirms what the company
believed - operating ethically generates clear benefits. The results showed that
customers are loyal to companies they trust. They also favour companies that
operate in a responsible manner. Vodafone operates in a competitive market; its
competitors also want to grow. In order to achieve competitive advantage,
Vodafone must understand its position relative to its competitors. Research
below shows the company's strong position.
Companies' actions are influenced by other stakeholders including pressure
groups and government regulators. A business that did not care about ethics
would simply seek to maximise revenues regardless of how its products affected
society. It is unlikely that such a business would continue to grow because, for
example:
regulators would punish their actions e.g. imposing fines and revoking operating
licences
Pressure groups would highlight unethical actions, adversely affecting what
customers think.
Ethical companies do the right thing and concern themselves with the long term.
This may damage financial performance in the short term. Ethics guide
decisions. When Vodafone first included moderators into young people's chat
rooms to create a safe environment for chat, the number of users dropped
significantly. This led to reduced revenues for the company. However, the
company believed that this was the right thing to do. The growing esteem in
which the company is held by the wider public justifies this approach.
Vodafone's ethical approach drives its response to changes in the environment. Whilst
described above in self-contained sections, many issues crossover, e.g. the advent of 3G
technology and video content is related to society's concern about adult material reaching
under 18s.


Vodafone UK's research has revealed that parents do not know the types of content
available via mobile phones. A survey of all adults showed, however, that they
believed restricting access to adult content on mobile phones was very important.
Together with other UK mobile phone operators, in July 2004 Vodafone UK launched
a joint Code of Practice for self-regulation. The Code requires operators to stop
under 18s from accessing commercial content classified as being unsuitable for
them. Operators must also offer parents the opportunity to apply a filter to Internet
access services. When developing this Code of Practice for content, Vodafone gave
phones to researchers working for children's charities. The charities could see the
sort of content available. They could also check that the restrictions were effective.
Vodafone was the first company in the UK to introduce a network bar that effectively
blocks access to all forms of content that has been rated as 18. This bar, called
Content Control, was introduced in 2004. This prevents access to 18 rated content
for children and young people. It is automatic and the bar is lifted only if customers
can demonstrate they are 18 or over.
Vodafone led the UK mobile industry in ensuring that proper restrictions and controls
are in place for its customers to prevent access to adult content by under 18s.
While working on the Code of Practice, which is self-regulatory, Vodafone had the
opportunity to consider what its ethical stance should be. It could interpret the
requirement to block access as having either an:
opt in policy - i.e. everyone would be barred from accessing over 18 material and
would have to make a conscious choice to receive this content or
opt out policy - everyone could access the material and request to have the bar
applied to 18 rated content.
Vodafone, through its work with the children's charities determined that an opt in
policy was the more appropriate and responsible position to take in the UK.
Vodafone seeks to reduce spam text messages by locating their source. Its
customers can help by sending these messages to Vodafone on the company's
VSpam service. Vodafone also watches network traffic for the sources of unwanted
messages. The efforts in this area have led to a very significant fall in customer
complaints.
In the UK Vodafone works in partnership with the government, police and others in
the industry to help combat mobile phone crime. It also advises customers and the
broader community on how to protect their phones and prevent fraudulent use.
Actions taken include setting up a register of equipment to block stolen phones. For
a number of years, prior to the ban on holding a phone while driving, Vodafone UK
has strongly discouraged this practice. The company devised practical actions to
help its customers, which included discounts on car kits to allow them to use their
phones legally and clear advice on the research relating to the use of mobile phones
in cars.