Business essays

Company Description

GEICO is the US famous insurance company, and its full name is Government Employees Insurance Company. The founder of the company is Leo Goodwin (Geico, 2017a). At the beginning of his business activity, Goodwin targeted the government employees by offering them to use the services of his company. However, nowadays, the company aims at a more versatile target audience. Specifically, the company provides 15 million auto policies annually as well as insures 24 million vehicles (Geico, 2017a). Moreover, GEICO is rather successful on the market. During the time of development, it has become the second-largest insurance company in the United States (Geico, 2017a). Furthermore, GEICO is considered one of the most progressive fast-developing insurance companies on the US market. Another important characteristic is that this company brings considerable benefits to the country and society. Thus, GEICO operates in 16 large offices around the United States (GEICO, 2017a). They give the working place for more than 36,000 employees (GEICO, 2017a). In addition, the company cares about the local communities and American society in general.

Corporate Social Responsibility Essence

In order to analyze the social responsibility of any company, it is important to determine the notion in question itself. Thus, social responsibility is “a form of self-regulation that businesses adopt as a part of their corporate conscience and citizenship” (Davis, n.d.). Companies develop their social responsibility strategies in order make a beneficial impact on society and, at the same time, create a positive perception of the brand among customers and develop high customers’ loyalty. Therefore, any corporate social responsibility strategy is targeted at the encouragement of companies to make a positive contribution into the lives of customers, employees, community, and society in general. Consequently, corporate social responsibility deserves a special attention from all companies because of its considerable social and economic benefits. Thus, customers can be sure of the high quality of services and products they purchase, while employees receive substantial remuneration for their work, including high salary and various types of benefits and bonuses. Furthermore, communities obtain investments in the social sphere. At the same time, with their corporate social responsibility strategies, organizations have an opportunity to develop and maintain a strong positive brand image among its customers. Moreover, the loyalty among the target audience can be developed much easier. That is why the organizations should pay special attention to the development of the CSR as part of their business concept.

Process of Corporate Responsibility Development of GEICO

GEICO has a rather well-developed social responsibility strategy. Thus, the company’s management is quite concerned about the positive corporate impact of the company on society. Firstly, the company insures its customers from negative accidents and their consequences. Providing high-quality service and a considerable level of protection are the company’s core ways of protecting society and its members. In addition, the slogan of GEICO in terms of CSR is “Giving back and making our communities stronger” (GEICO, n.d.d). That is why the company has always paid much of attention to the issues of social responsibility.

Initially, the company’s social responsibility strategy began with the core services that it provided to its customers. When GEICO was founded in 1936, its services presupposed insuring the lives, vehicles, and health of government employees (GEICO, n.d.a). Thus, the company brought benefit to a small part of local society by protecting them. During the time of its early development, the company enhanced its social responsibly through increasing the number of offices, the level of customers’ protection, and the range of target audience. However, the process of GEICO’s development and growth also led to the improvement of the range of social responsibility strategy. Nowadays, the company invests large amounts of financial resources into its CSR strategy that includes many elements and components.

Elements of Corporate Responsibility of GEICO

There is no doubt that the company has a high level of goodwill and customer loyalty. One of the core reasons for that is the considerable impact of GEICO’s corporate responsibility strategy. Nowadays, the company has different directions of its social responsibility investments. Among them are the following areas.

Insurance Safety for Customers

The company offers high-quality insurance services and a high level of protection in case of any accidents. Moreover, the company has generous payouts to those customers who have had an accident. Due to GEICO’s long presence on the market, customers are sure of the services, provided by the company. Considering its effective performance on the insurance market, GEICO was named Business of the Year in 2012 (GEICO, 2017b). In addition, the company has had a stable and successful financial and business activity performance in the recent years. As a result, GEICO has been determined as a successful company in Forrester Research’s 2014 US Mobile Auto Insurance Functionality Benchmark (GEICO, 2017b). Thus, one can see that the company makes a considerable contribution to American society in protecting their rights and providing high quality services for many years.

Information Procurement

In addition, the company increases the public awareness and insurance education of people. GEICO invests into the development of social consciousness among its customers by insuring their vehicles, lives, and health. For example, in 2016, the company organized more than 60 presentations and seminars for students about safe driving (GEICO, n.d.e). Furthermore, the company developed a partnership with different types of federal, state, and local agencies as well as private companies in order to motivate safe driving among their customers. These companies work in the synergy with GEICO and prove much information and motivation of safe driving, which helps decrease the amounts of driving accidents. As a result, the company has earner a considerable award. Specifically, GEICO was given the title “The pocket auto insurer” (GEICO, 2017b). Thus, one can see that the company makes a considerable impact on society of the United States by educating people on safe driving, thus preventing car accidents.

Effect on Employees

At the same time, GEICO is a good employer since it provides a good remuneration for its employees for their work in the company. With a high level of their income, employees have an opportunity to maintain a proper level of living for their households and families. Consequently, their families have the education and medical services of high quality. Moreover, a considerable corporate culture, which has been developed in the company, enables employees to work in a positive and favorable corporate climate. One more important element of GEICO’s social responsibility strategy and its effect on the company’s workers is training and professional education provided to them. Consequently, the employees of the company have a good opportunity to increase their level of knowledge and professional skills due to the trainings and seminars that are financed by the company.

Local Communities

The company’s impact on the local communities is considerable as well. Moreover, the company’s social responsibility actions are rather varied. For example, the GEICO Corporation invested approximately $6,6 million to the projects that are targeted helping and benefiting people in the local communities in 2016 (GEICO, n.d.e). This significant amount of financial resources has brought great benefits to the local communities. Another important fact is that the corporation has organized more than 800 charity events, targeted at various spheres of community life (GEICO, n.d.e). One more important sphere of corporate social responsibility strategy in the local communities is volunteering. Thus, the company encourages workers and customers to participate in this type of activity. As a result, GEICO attracted approximately 10,000 volunteers to different types of projects and they had about 23,000 service hours in 2016 (GEICO, n.d.e). Consequently, the company’s considerable positive and beneficial impacts on the local communities in terms of corporate social responsibility strategy are quite obvious.

Donations

Despite the fact that the company organizes numerous charity and social projects by itself, it also sponsors of various types of events that are organized by other companies and organizations. In such a way, GEICO donates a significant percentage of the total revue to charity. One of the most considerable directions in 2016 was the United Way charity organization. Thus, the company donated more than $7 million (GEICO, n.d.e). In addition, $2,6 million have been given the Insurance Institute of Highway Safety that is targeted to increase drivers’ social consciousness that leads to decreasing the amount of car accidents (GEICO, n.d.e). As it can be seen, the company has given a considerable percentage of its revenue for donations in various sectors.

However, the spheres of GEICO’s donations are quite divers. For example, the company gave approximately $400,000 to the National Urban League and the same amount of money to the USO Organization (GEICO, n.d.e). Moreover, the company invests into the development of the healthcare sector of the USA. Specifically, GEICO contributed more than $160,000 to MedStar Health’s National Rehabilitation Hospital (GEICO, n.d.e). Therefore, the company makes quite considerable donations to various spheres of social needs. It is also important to say that the total amount of donated money and the company’s social responsibility strategy budget are rather significant as well.

Sponsorship

During the time of its development, GEICO has managed to build strong partnerships with numerous social organizations and companies. Moreover, the company acts as a sponsor for a great variety of society organizations. The organization constantly supports the Girl Scout Council of the Nation’s Capital (GEICO, n.d.b). The company works in cooperation with this organization with the aim to develop confidence, sympathy, and other beneficial traits of character in young girls. The general mission of the organization is to make the world better by fostering the right attitude of young women.

How It Works

Another organization that can be proud of being sponsored by GEICO is Junior Tennis Champions Center. The company supports this sport organization in order to motivate the development and growth of a healthy generation. The financial support of the company enables this tennis center to ensure an effective training and high performance in tennis competitions.  According to the company’s statistics, “101 students have graduated from JTCC’s invitation-only, Champions program” (GEICO, 2013). Not only does GEICO give an opportunity to children to develop their skills in sports, but it also supports the center’s graduates with scholarships.

Environment Investment

One of considerable spheres of GEICO’s corporate social responsibility strategy is the preservation of environment. Thus, the company invests into the research and development as well as the effective implementation of eco-friendly manufacturing and people’s living. In addition, the company always informs its customers that its business is eco-friendly one. GEICO makes considerable investments into the introduction of recycling programs as well as energy and water-saving natural resources. In addition, the company supports this strategy in its insurance offices (GEICO, n.d.c). Another issue GEICO always stresses on is “saving energy, fuel, and paper through geico.com’s paperless options” (GEICO, n.d.c). Finally, the company develops a continues process of looking for the ways of eliminating its wastes effectively.

Conclusion

Considering the analysis of GEICO’s corporate social responsibility strategy, one should say that the company makes a very considerable emphasis on the social development and improvement of society. Thus, the company allocates large amounts of financial resources into the charity, education, sport activity, and protection of the natural environment of local communities as well as the United States of America in general. In addition, the company has developed long-term partnerships with numerous companies and social organization that helping GEICO implement all target goals of its CSR.

There is no doubt that all descried elements of corporate social responsibility strategy of GEICO are beneficial for society. At the same time, its CSR strategy brings good benefits to the company as well. Thus, it creates the positive perception of GEICO as a company. In addition, it develops the credit of trust to the company among the target audience, which is definitely quite important in the insurance industry. Moreover, CSR helps develop customers’ loyalty and brings additional advertisement for the company. In such a way, the number of customers and the market share GEICO increases as well as its profitability.