Corporate Social Responsibility and its Implementation in the Daimler AG

Table of Contents

Executive Summary

List of Figures

List of Abbreviations

1 Introduction
1.1 Problem Definition
1.2 Objectives
1.3 Methodology

2 CSR Definition
2.1 Idea of CSR and the Role of Sustainability
2.2 CSR Implementation

3 Implementation of CSR by Daimler – the Sustainability Strategy
3.1 Concepts of Structure and Processes
3.2 Key Issues and Fields of Activities

4 Results

5 Conclusion

Bibliography

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Executive Summary

The sustainability of business activity is one of the key issues for companies in the 21st century. For it is stated as a fact, that the current way of use of our environmental resources is not adaptable for the future, companies have been taken into responsibility for not taking only their profits into account, but also their impacts on our environment. In addition the modern society more and more demands social value of these companies to participate in social development.

Corporate Social Responsibility is offered as an approach to handle these challenges, without ignoring the financial survival and the competitiveness of the companies. In the following assignment the theoretical background of this concept is explained and a practical implementation is described on the example of the Daimler AG. As a result it is stated, whether this example is capable of being a role model or needs a role model itself.

List of Figures

Fig. 1: Conceptual dimensions of Daimlers Sustainability Strategy

Fig. 2: : R&D expenditures

List of Abbreviations

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1 Introduction

The necessity for sustainable and responsible acting is the rising need for resources due to the increasing world population. Indicators such as population growth, industrial output and use of non-regenerative resources reveal an overstress of the ecosystem and most certain an imminently collapse of it (Meffert et al. 2012).

Currently the companies are faced with the challenge of sustainable capitalism transition, which for its paradigm changes in economic and social aspects causes the need for responsible and sustainable acting (Elkington 1997, Jonker & Eskildsen 2009).

An instrument to keep pace with this development is the approach of Corporate Social Responsibility (CSR).

According to Jonker CSR is one of the present organizational challenges (Jonker & de Witte 2006, p. 1ff). But it is assumed without alternatives for the long-term survival of companies, for Jonker and Eskildsen (2009) already ascertained: the success in future economy is not only determined on financial profits, but also on the reputation of a company and on her value for society.

1.1 Problem Definition

CSR is a relatively new issue in business and science. On the example of Daimler a practical implementation will be examined.

1.2 Objectives

The objective is to examine Daimlers` CSR approach.

1.3 Methodology

In chapter 2 CSR assessment factors are identified. In chapter 3 the CSR approach of Daimler is described. In consolidating both a state of development is concluded in chapter 4.

2 CSR Definition

In this chapter the theoretical background of CSR is examined. The aim is to identify criteria, which are useful to reflect the Daimler CSR approach on.

2.1 Idea of CSR and the Role of Sustainability

The definition of CSR and its measures and implementing reasons are divergent among science and business. It is justified in general by the changing role of the companies from being responsible to the own profit to being responsible to society (Kotler et al 2011, Jonker & de Witte 2006, O`Riordan & Fairbrass 2006, O`Riordan et al. 2006).

The idea behind CSR is in general a social orientation of business activity. Its reason is the reflection of economic behaviour on ethics and norms for responsible business activity (Meffert et al 2012). According to Kotler et al. (2011), with CSR the purpose of marketing itself is reflected on the problems of the present which are summarized to environmental pollution and exploitation, economic uncertainty and social inequality. This is in contrast to exclusive profit orientation. But the pressure for implementing CSR is caused by the companies` stakeholders (O`Riordan & Fairbrass 2006). According to Freeman (1984, p. 52), stakeholders are defined as “groups and indivi-duals who can affect or are affected by, the achievement of an organization`s mission.”

CSR is the voluntary engagement of a company which is directed to include social and environmental interests in its activities. The overall goal of all CSR activity is the sustainable improvement of the living quality of the society. The benefit for the company should be the raise of the degree of familiarity, the improvement of the image and, due to these, a strengthened competitiveness (Kotler et al. 2011, Kotler and Lee 2005, Meffert et al. 2012).

The above mentioned social pressure has changed the demands on companies` activities from short-term reactive measures to long-term proactive measures. The basic idea of business sustainability is the correlation of long-term customer satisfaction with the need of the company for long-term viability (Kotler et al. 2011, Meffert et al. 2012).

Elkingtons (1997) sustainability concept, the Triple Bottom Line, focuses equally on economic prosperity, environmental quality and social justice. The synthesis of these three bottom lines has to be result in sustainability accounting, auditing and reporting.

A clear assessment, if a company is sustainable, is often not possible. But it should be possible to estimate whether it is moving in the right direction or not (Elkington 1997).

Sustainability is a key idea of CSR, as CSR is an aspect of a companies` sustainability. They should not be divided in practice.

2.2 CSR Implementation

The insight, that long-term success of a company is only possible due to sustainable and responsible activity is the basis argument for CSR implementation (Meffert et al.2012, O`Riordan & Fairbrass, 2006).

CSR should be included fully in the companies` activities. The CSR-management, in reliance to the business organization, includes four organisational aspects (Jonker & de Witte 2006): The first is the identity, including core values and the corporate identity. The second are the systems, including communication design and competence deve-lopment. The third is the accountability, including auditing, reporting and accounting of appropriate standards. And the fourth is organizing transactivity, including stakeholder involvement. The Key point is to develop those elements, which are crucial for the individual company, with a refined strategy based in the business proposition. If innovation is a is a key aspect of the strategy, issues such as diversity, inclusion, room to manoeuvre, employee values, dialogue and communication should be preferred.

CSR-strategies have to be adapted to regional circumstances, for they are often designed for the home-country and cannot be used global without differentiation. For globalization and internationalization of the companies and groups is gaining, this aspect has to be considered carefully (Müller & Schaltegger 2008, Dufor 2009).

The relevance of social issues for CSR engagement has to be assessed, for not every issue is relevant for the companies` success or is affected by the companies` activity in the same intensity. The success of CSR is more related to the choice of situational and company-specific approaches than to the number of measures (Dubielzig 2008). It has also been shown that the way of communicating CSR measures, or the companies’ communication strategy, is important for its success (Lehtimäki et al. 2011). So the involvement of the stakeholders is essential (Meffert at al. 2012).

CSR has to be harmonized with the companies` strategic- and marketing goals. At all levels of management and marketing process conflicts with CSR are possible. To handle these CSR has to be implemented in every level of company planning to be a basis for decision making processes, strategies, instruments and measures, and all internal and external domains. Therefore a holistic concept has to be embedded in corporate strategy (Meffert et al. 2012, O`Riordan et al. 2006, Jonker & de Witte 2006). Also the identification of the different stakeholders and of the intensity of their different relevance has to be solved (O`Riordan & Fairbrass).

3 Implementation of CSR by Daimler – the Sustainability Strategy

The Daimler CSR approach is internal called Sustainability Strategy. The following chapters explain the structure and the fields of activity of this strategy.

The Daimler Sustainability Report is certified by the Global Reporting Initiative with Rating A+. This includes its verification by external assessors (Daimler 2012a). Therefore it is considered to be a reliable source.

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