1.0 Introduction
1.1Definition of Responsible Business
Responsible business is the same meaning as business ethics which mean runs a business honestly, and tries to think more about the environment and people when making decisions for business, so that can make a positive contribution to the local community and wider society (ORB, n.d.). Besides, business responsibilities also known as Corporate Social Responsibilities (CSR), it was actually a management concept whereby companies integrate social and environmental will be more concern in business operation and interaction with stakeholders. According to Starbucks (2004), a responsible company is the one who always listen to the stakeholders and response honestly with concern. Stake holders can be categorise as a person, organisation or a group that has interest or related in an organization. Examples for stakeholders are directors, creditors, employees, shareholders, supplies, government, the community and unions. Proton 1.2 History of Proton Malaysia
PROTON (Perusahan Otomobil Nasional Berhad) started their very first business on May 7, 1983 and main in manufacture, sell motor vehicles and related products, which including spare parts accessories for vehicles and other components. As a very memorable history, the first car that produced by PROTON is Proton Saga (Appendix 1), which is launched on July 9, 1985. The original idea that conceived the Malaysia car is actually by a Malaysian, his name is Dato’ Seri Mahatir Mohamed, which is prime minister from Malaysia.
The main office for Proton is in Shah Alam, with an area of 923 900 square metres and originally designed a capacity of 80 000 units per year. Moreover, the capacity has been increased to 230 000 units per year in 1997 and with the construction of medium value factory, which located next to the main office. Proudly to announce again, today, the Shah Alam factory is proudly improved the capacity from 230 000 vehicles per year to 240 000 vehicles per years.
PROTON also has a total of 11 associate companies and 11 of subsidiaries companies, which involves in research and development, service activities, sales and manufacturing.
On the other hands, Mitsubishi Corporation and Mitsubishi Motors Corporation are also shareholders, components supplier and technical assistance partner for PROTON. In 1996, December 30, PROTON has been launched Proton Putra with a two-door coupe; this made a major step for PROTON to upgrading their engineering capabilities with the acquisition of Lotus Group International Limited, a British automotive company that specially manufacture luxury sports car. Lotus and PROTON has been offer large scale of manufacturing capabilities with world- class engineering expertise.
Todays, PROTON has making themselves mark internationally as innovative and competitive automobiles. Proton cars are now been exporting to over 50 countries including European country and United Kingdom. With cares and concerns of it stakeholders, PROTON has been archive goals as internationally successful Malaysian automotive manufacturer. PROTON is also the company that producing innovative products, competitive price and being customer orientated (History of PROTON, 2012) 2.0 Current Business Practises of Proton
2.1 Pro’s to Community (PROTON gives F1experience to orphans and school kids)
When 9 of April 2011, Proton have been brought over 130 orphans and school kids, aged between eight to seventeen to Sepang, and experienced the practise session of the 2011 PETRONAS Malaysian Grand prix. All the children are managed to get up close and personal with lotus Renault GP team. Besides that, they are able to watch the practice section from the grandstand to enjoy the excitement and also join in the fun activities at the Proton booth provides by PROTON at the F1 village.
Proton was providing a meet- and -greet session at the pit walk to let children have a chance to meet LRGP drivers. To welcome all the children’s, Proton have been invites drivers Vitaly Petry, Nick heidfeld and Bruno Senna to meet with the kids. Proton has been arrange others activities for the children too, after the F1 session children was visited to the National Automotive Museum, explore at the SIC mall area and play a quiz section.
This educational visit is actually a part of corporate social responsibilities initiatives during the PETRONAS Malaysian GP F1 race. Datuk Sri Syed Zainal Abidin (Proton’s managing director) said that Proton will continually to further develop its CSR program, and this is a good way to practise so(Anthony, L., 2011.)
Proton is ethical because they provide a unique experience to the school kids and orphans; this might be their chance of a lifetime. Even Proton already be a global player in automotive industry but they are still remains corporate citizens and now is the time to pay back to the society. Proton was done a very good job in taking cares of the children future, and gives them some unique knowledge that won’t be relevant to their daily life.
2.2 Pro’s to Employees (Proton Design Competition 2014 is open to Malaysian youth)
According to the star online (2014), a proton design competition has been organised by PROTON and is inviting all the youth in Malaysia to participate and the theme was PROTONCITY2020.This competition is open to Malaysian youth from 13 to 25 years old. The main reason proton held this competition is to expose them to the world of car design, show their creativity and provide a stage for them to show their talent. This competition is one of the ways to look for creativity and interact with the younger generation.
Besides, Proton believes that there is a lot of young talented Malaysian and give them a channel to design the ability in car design and will find out some future car designer. As proton has a very journey to move on in the future so they want young Malaysian to be part of them. People are started to get bored of the car design, is it also good a very good chance to carry out the youth imagination.
There are two categories in these competitions, the category one is open for individual’s ages 13 to 17 and category two is age’s between18 to 25. There are no group entries allow in the competitions. There are a lot of prizes that is given to winner including cash rewards, a laptop and an internship at Proton’s Research & Development.
These issues is ethical because of Proton have been providing a stage for younger generation to perform their creativity and talent. It will also help Proton in future from avoiding lack of creativity on car design and have can provides more job opportunities for the youth nowadays.
2.3 Pro to shareholders (New model is launched)
New Proton Iriz is launched and it is new compact car from the national automobile maker that is set goals to make waves in local and global markets. The car was launched by former Prime Minister Tun Dr Mahathir Mohamad at Proton City yesterday and is targeted to sell 160,000 units a year. Proton Iriz have been tested on snow-covered roads in Sweden and also on desert terrain which is in extreme conditions (Ivan, L., 2014).
Besides, Tun Dr. Mahathir Mohamed said that Proton Iriz was positioned in the B-segment. Proton Iriz also would help Proton to further capture a larger share of the automotive market with its competitive prices and innovative technological features. The on-the-road price ranges from RM42,438 for 1.3 litre variant to RM58,268 for the 1.6 litre variant with seven colour choices. The price is affordable, so Proton trust that more and more younger generations will buy Proton Iriz as their first car.
In addition, Proton Iriz also comes with the highest safety standards and was rated five stars by the Asean New Car Assessment Programme (nst.com.my, 2014). As Tun Dr. Mahathir Mohamed believed that the sales and shares will be boots up because of the Proton Iriz, so the shareholders also will get back more returns and rewards.
2.4 Con’s to government (Proton lack of Technology improvements)
Founding of Proton in 1983 is actually a big mistake to begin with because of no technology improvement. Proton Company is lack with innovation and also research development department. As an example other company have been start promoting hybrid and electric car to be eco-friendly to the environment but Proton still launched new cars with using fuel. Therefore, Proton is challenging times ahead as it critically needs to develop new technology to remain competitive and win back lost market share (Yew Yin, K., 2012.)
Mahathir's have been make a mistake in ignoring the economic fundamentals of the industry was compounded by our lack of expertise or comparative advantage to produce cars. To encourage people to buy Proton, Government Malaysia have been increased the import duty for other brand’s car, accessories and car spare parts. As a result, the Malaysian that supports other brand’s car is suffered due to need to pay for extra. For over 30 years, Malaysians need to pay tax for every car they purchase.
Government changes rules and regulations to stop other cars from entering Malaysia markets to force citizens support local cars. Besides, governments do also providing financial assistance to keep Proton afloat. In conclusion, Malaysians have pay for extra for others brand’s cars, and for poorer people without provide choice and ended up can only afford Proton cars (Tong, Terpstra, & Ngat Chin, 2012).
2.5 Con’s to consumer (Sales drops due to bad performance of car and complaints from customer)
The research house has been highlighted in the report and state that national carmaker’s market share had fallen from 26% in 2011 to 21.2% in 2012 and in 2014 its fall again to 19%, which is a very serious figure to Proton (Mahalingam, E., 2014).
Mitsubishi was the company that is helping Proton in term of technology and continuing making money from Proton .Equally important was the poor quality of management. Just before the privatisation exercise according to Mahathir, Proton had accumulated RM4 billion during Tengku Mahaleel Ariff's tenure as chief executive officer, but its cash reserves had dropped to RM600 million during his successor Mohammed Azlan Hashim's stewardship.
There are a lot of consumers are complaints proton due to their service and car quality is too bad. The only way to improve business reputation is to provide customers good services plus know customers’ needs and wants to satisfy them. Anyway, Proton’s management has failed to understand consumer will not use their money to pay such poor quality cars. If a company cannot serve its customers satisfactorily, it should exit. Proton had been built very poor images to the society due to the poor quality of cars and never really improved from the beginning (Pereira, J., 2013). 3.0 Ranking Proton cases (best to worse)
3.1 Cares for the community
Proton is the company that practice corporate social responsibilities because they have been took over 130 orphans and school kids, aged from eight to seventeen to Sepang, and experienced the practise session of the 2011 Petronas Malaysian Grand prix. This is to rewards back to the society and also cares for the children to gain new knowledge.
Meaning of Corporate Social Responsibility (CSR) is defined as the voluntary activities undertaken by a company to operate in an economic, social and environmentally sustainable manner (CSR, 2014). Proton is done these activities for the orphans and school kids, by done this action it might help children to complete their dreams. In addition, Proton also provides children a unique value which might be their only chance to get involve with F1 formula competitions. This is to help children to expand their knowledge and have different dreams.
3.2 Cares for employees and young generations
Proton has been held a design competition that inviting all the youth in Malaysia to participate and the theme was PROTONCITY2020. This competition is mainly lets younger generations nowadays to show their talents and creativity. This is the chance to break down the traditional design car and change something new.
The ethical theory used by Proton is deontology 1 and the meaning was duty and non-consequentialist – principle-oriented. It is actually a value of principle oriented, it more focus on intrinsic value like own behaviour. As the competition is held is mainly to let youngster to show their creativity and talent.
3.3Lack of technologies
Proton has no improvement in technology from the very beginning. Proton has been take government subsidies for almost 30 years but yet they are no improvement or even create something new to reward back the government. Protons are not even thinking to save the environment and keep pushing fuel using cars to the society.
The ethical theory that use here is deontology 2, there are separate into three categories, consistency, human dignity and sustainability. As an example, the body shop states that try not to create the product that harm the environment. Back to proton, they keep creating fuel using cars with a cheaper price which affordable by society, this will really harms the environment like, air pollution. As the golden rules, if you want someone to treat you fair, you must treat others fair as well. For example, you treat people well others will treat you well also. 4.0 Recommendation
4.1 Communities
Proton is always get support from government for more than 30 years, since Proton is already on the stable stage, government should stop supporting them and start to invest in others industry for new improvement. Proton is a company that can be independent without getting support from others because there is more and more improvement in the company.
Proton should be did more charity and CSR to rewards back to society. This is to corporate with government and build good image for the society so that more citizens will be support Malaysia cars. Proton should be also more often send children to join their activities and to create awareness to them and tell them the benefits of Proton. So that in the future they will support Proton and set Proton as their dreams car.
4.2 Technologies
Proton should be improving the technology but not just keep coming out with new model. As an example, Honda and Toyota already launched hybrid and electrical cars to be eco-friendly. Hybrid car means a car with a petrol engine and an electric motor, each of which can propel it. Meanwhile an Electric car is a car operates with one or more motor. This is to let Proton take cares about the environment and to make a fuel saving cars. In addition, Proton should create more awareness about the way of take care the environment to save the earth.
4.3 Employees
Besides, Proton must also offer more job opportunities for younger generation in future. This is to avoid Proton lack of new creativity and no technology improvement. Reason of hiring young generation is because they are better in technology and no afraid of technology change. As to compare the older generations, most of them are doing paper works and not good with technology. So, if both generations work together, youngster can get experience from older generations and older generations can get new idea from younger generations (Nlhrmanager, n.d.). 5.0 Conclusion
Every company should do business ethically, when companies operate in an economically, socially and environmentally responsible manner, as transparently, it helps them succeed, in particular through encouraging shared value and social license. Justification and Management of environmental and social risk influences are important for business success abroad, as the feedback to companies of losing that social license, both in terms of share price and the bottom line might be important. As Proton takes advantage doing corporate social responsibilities, there is a better understanding that incorporation of responsible business practices into investments and operations. It is benefits the local economies and communities, but makes good business sense. The good activities CSR done by Proton are given F1experience to orphans and school kids, they also held design competition for youngster.