Dell

The power to do more

Monday 12 June 2017, by Teah

1 inspired

A. The main facts about the activities of the company.

Dell is a multinational company which specialises in the design, development, manufacture & sale of IT products and the related services. Their portfolio includes a range of laptops, desktops, tablets etc as well as big data & analytics, business process and other IT support services.
Dell’s slogan is “the power to do more”.
With a market share of 15.9%, Dell was the third largest PC vendor in the world in the first quarter of 2017, after Lenovo and HP Inc.
Dell employs 78,000 individuals around the globe, including 39,500 in the Americas and 32,100 in the Asia-Pacific region.Within seven months of launching Dell.com, the company was selling $1 million a day in products. Dell currently ships an average of 140,000 devices each day, equaling nearly one per second.
Dell Inc. has been the No. 1 supplier to U.S. businesses both large and small for 10 years. This includes the 10 largest U.S. companies, the top six internet service companies, and the top five U.S. commercial banks, all of whom use Dell computers.
Operating in 180 countries globally
Serving 98% of Fortune 500 companies
Combined revenue of $74 billion
As a result we believe Dell successfully combines the creation of economic values with the promotion of ethical values which we will discuss more below.

B. The Ethical challenges this company is addressing.

Dell had a huge challenge on their hands after 2008 and 2009 court cases where they were found guilty of false advertising, fraud, abusive debt collection practices, and deceptive business transactions. Dell were one of the companies ensnared in the high profile scandals involving Foxconn (a Taiwanese multinational electronics contract manufacturing company). Dell were criticised for the back seat approach they took to the ongoing unsatisfactory and often cruel working conditions in the plant. Dell recognised that they needed to change the way they did business in order to salvage their companies image. They could not compete with the sleek and modern Apple image so needed to establish their own unique position in the information and technology market.
Dell has been named 2015 and 2016 world’s most ethical company which is a nice shift from the 2010 $100 million fine for fraud. Dell has committed to become an innovator not a follower. A huge part is this commitment is directed towards their partners, communities and planet. The challenges Dell have focused on addressing are anti-bribery and anti-corruption, fair competition respecting the intellectual property of others, preventing money laundering and terrorist financing, charitable contributions and activities, compliance with trade laws, protecting the environment and promoting human rights. For example in regards to promoting human rights, Dell select vendors, suppliers and business partners who demonstrate a commitment to the health and safety of their workers and to compliance with laws regulating wages, hours and working conditions and do not use forced or indentured labor.

C. What makes you believe this company is really ethical and why you trust it?

“From its leadership structure and governance practices to its environmental efforts and employee engagement, Dell takes their role as a corporate citizen seriously,” Ethisphere CEO- Timothy Erblich

Whilst Dell has received a lot of backlash in the past we trust in their current ethical codes due to their commitment to change their ways. For us the fact that the in 2010 Michael Dell, the former CEO Kevin Rollins and the former CFO James Schneider contributed a total of $11 million out of their own pockets towards a $100 million penalty for disclosure and accounting fraud, shows an acceptance of responsibility. This acceptance on a more personal level shows that Dell is no longer hiding behind the face of the company but is accepting that these decisions to be unethical come from the management team & it is thus them who should accept the consequences. It is thus a strong precedent for other big businesses who plead ignorance.

Whilst it took Dell getting fined to spur the change, it is clear that they are taking the change of direction seriously & are committed to making the company better. A key example of this is their list of 21 ambitious goals, which they hope to achieve by 2020. These span a range of CSR related areas but the 10x20 goal is perhaps their most ambitious as it states that any good that comes from their technology will be ten times as much as the cost to make & use it.

Another really interesting project they have since undertaken is their commitment to using ocean plastics. Dell have created the first commercial scale global ocean plastics supply chain. Through this they utilise 25% ocean plastic in their 100% recyclable packaging. This commitment helps to combat past damage and prevent further pollution.

D.The possible challenges facing the company in the future and how you think this company may improve.

Greater technology advances, increasing consumer power and the growing competitive market will challenge the future success of Dell. The business must take a proactive stance to build a strategic advantage over counterparts and ensure the succession of the business.
One main challenge of the business will be a loss of control over their customer relationships. Increasingly consumers are engaging in two-way communication and conversation and, as a result, brands are losing their information monopoly. As customers are gaining more power to choose where and how they interact, they will begin to choose a smaller number of organisations with which to maintain primary relationships, often choosing organisations which reflect their own values. To remain prominent within the market, Dell must continue to engage with consumers and openly communicate the values inherent at the core of the business.

Increased competition and the risk of commoditization is another challenge to the firm. Digital advances and globalisation have encouraged both a more informed consumer and competitor. As more information becomes available to customers and competitors, and non-traditional players enter the market, prices, values and product characteristics all tend to converge. With price comparisons allowing for transparency in the market and margin play becoming less and less acceptable to consumers. To combat this, Dell could shift their focus from products to services as a way of differentiating themselves and also increasing margins. They must attempt to create information asymmetries, making it difficult for customers to directly compare providers, and focus on innovation that can truly revolutionise and disrupt the market.

Dell has committed to their ‘Legacy of Good Plan’, aiming for the completion of 21 strategic goals by 2020. The goals reflect three main focuses of the business; the environment, the community and the people. By striving to meet sustainability goals which relate to the entire value chain, Dell have encouraged further improvements from a social and ethical point of view which will aid the business in meeting the demands of an ever-changing market. The asset of social and ethical engagement will continue to create new opportunities for the technological sector and assert a positive impact over individuals, communities, government and society. The engagement of Dell with their 21 strategic goals demonstrates their intention to continue to use their core business values to aid social issues at home, and abroad.

Bibliography

Sector: Information and communication

Official website: http://www.dell.co.uk

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