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Csr strategy and brand promotion


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CSR activities and its effect.

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Csr strategy and brand promotion

  1. 1. Department of MarketingAssignment Corporate Social Responsibility a bright idea? HEMPLE, James Grant Professor Heiner Evanschitzky | Globalisation and CSR | MK 924 | Elective Individual Essay | Session 2009/2010 | Semester B | Submission Date 02/03/2010 | Msc International Marketing
  2. 2. Contents1.0 Introduction ................................................................................................ 32.0 Measuring CSR Activities ............................................................................... 43.0 CSR Conceptual Framework ........................................................................... 64.0 Four CSR Strategies ..................................................................................... 84.1 Marks and Spencer’s CSR Strategies ............................................................... 84.2 Tesco CSR Strategies .................................................................................. 104.3 Sainsbury CSR Strategies ............................................................................ 114.4 The Co-operative Group CSR Strategies ........................................................ 125.0 Impact of CSR Activities .............................................................................. 155.1 Marks and Spencer’s ................................................................................... 165.2 Tesco ........................................................................................................ 165.3 Sainsbury’s................................................................................................ 175.4 The Co-Op ................................................................................................. 176.0 Conclusions ............................................................................................... 19References ......................................................................................................... 20Bibliography ....................................................................................................... 23Appendix i – Principles of CSR ............................................................................... 24Appendix ii – Marks & Spencer and Tesco ............................................................... 25Appendix iii – Sainsbury’s and The Co-Op ............................................................... 27 2
  3. 3. 1.0 IntroductionCorporate Social Responsibility (CSR) goes beyond the name and symbol of the brandand encompasses a much deeper understanding. de Chernatony (2006) offers the brandiceberg to permit a holistic view of the organisation.Figure 1: Brand Iceberg Source: adapted from de Chernatony (2006)CSR has created a concentrated discussion among academics (Carroll, 1999; Pearce andDoh, 2005). Luo and Bhattacharya (2006, pg 2) highlight the importance of CSR bystating that:“CSR has quickly become an inescapable fact in corporate environments. As many as 90 percent ofFortune 500 companies have strategic social responsibility plans and initiatives in place.”Robins (2008) states that CSR is the concept of what comprises “good” or “attractive”business behaviour and relates to what can be judged “morally” or “ethically” good.Waddock (2004, pg 6) defines CSR as:“The subset of corporate responsibilities that deals with a companys voluntary/discretionaryrelationships with its societal and community stakeholders.”Companies view integrating a dynamic CSR existence as a device to increase theircompetitive advantage with interior and exterior stakeholders (Branco and Rodrigues,2006). 3
  4. 4. This essay will briefly discuss the different approaches for measuring CSR and develop aset of objective and subjective criteria to analyse CSR activities. Additionally, this essaywill describe and evaluate the CSR strategies, initiatives and actions of four Britishretailers: Marks and Spencer, Tesco, Sainsbury’s and The Co-Operative. Finally, theessay will conclude by evaluating the impact of these CSR activities based on observableevidence.2.0 Measuring CSR ActivitiesThis section briefly discusses the various approaches to measuring Corporate SocialResponsibility. Walsh and Beatty (2007, pg 128) argue that:“Corporate reputation may be viewed as a customer’s evaluation that results from eithera personal interaction experience with the service firm, as well as from reputation-relevant information received about the firm.” Brammer and Millington (2005) suggestthat existing literature portrays a correlation between corporate reputation and socialresponsibility this viewpoint is underpinned by Fombrun and Shanley (1990) and Gregory(1991). Brammer and Millington (2005, pg 30) suggest that:“Philanthropic spending may play a significant role in stakeholder management and leadto stakeholders holding philanthropic corporations with higher esteem.”Bhattacharya and Sen (2003) state that some of the strongest consumer–companyrelationships are based on consumers’ identification with the companies that help themsatisfy one or more key self-definitional needs.Shuili et al (2007) argue that there is a quantifiable link between consumers CSRawareness and CSR beliefs. Furthermore, Shuili et al (2007) state that consumersawareness of a brands CSR activities leads to a more favourable decisions whenconsumers make decisions regarding how much they believe the CSR activities. 4
  5. 5. Figure 2.0 highlights Lee et al (2009) conceptual framework which proposes that CSRand Corporate Reputation are closely correlated when measuring the impact of CSRactivities. Figure 2.0: CSR and Reputation Principles of CSR Economic Legal Ethical Philanthropic Processes of CSR Environmental Economic Program Social Program Educational Program Program Outcomes of CSR Corporate Reputation Source: adapted from Lee et al (2009)Walsh and Beatty (2007) proposed the five ) five-dimensional Customer-based C based CorporateReputation (CBR) scale which was further developed by Fombrun et al (2000) whoproposed the six-dimensional Reputation Quotient (RQ) as a tool to measure CSR dimensional CSR.Figure 2.1: Reputation Quotient (RQ) : Workplace Vision & Financial Environment -> > Social Emotional Appeal Leadership Performance Products & Responsibility Services Source: adapted from Fombrun et al (2000) 5
  6. 6. 3.0 CSR Conceptual FrameworkThe criteria used to analyse CSR activities is underpinned by three main theories; theStakeholder Theory (Carroll, 1999) Porter’s (1985) Value Chain and the Pyramid of CSR(Carroll, 1999). The stakeholder theory states that organisations have responsibilities toa range of stakeholders, including those internal and external to the organisation(Freeman, 1984; Clarkson, 1995; Donaldson and Preston, 1995). The main stakeholdergroups identified by Carroll (1991) include: consumers, employees, suppliers,community, social activist groups.The first stage of the conceptual framework assesses the CSR activities of the selectedorganisation ranking the organisations performance against each of these key groups byconsidering their role in the company mission statement. Additionally, Porter’s (1985)Value Chain has been utilised to assess the CSR activities. The value chain highlightsthe activities within a company that add value to the goods or services produced. Theprincipal idea is that the value added at each stage of the chain exceeds the cost of theactivities. The conceptual framework rates the organisations based upon its initiativesin the Primary and support activities of the value chain.Figure 3.0: Value Chain 6 Source: Porter and Kramer (2006)
  7. 7. Furthermore, the conceptual framework is underpinned by Carroll’s (1991) pyramidtheory of CSR. Carroll (1991) puts forward four kinds of social responsibilities thatconstitute total CSR: economic, legal, ethical, and philanthropic. The conceptual eframework ranks the organisations based upon these responsibilities.Figure 3.1: Pyramid of CSR Philantropic Responsibilities: be a good corporate citizen Ethical Responsibilities: be ethical. The obligation to to what is right and fair. Avoid Harm Legal Responsibilities: obey the law. The law is societys codification of right and wrong Economic Responsibilities: the foundation upon which all others rest Source: Adapted from Carroll (1991) e:The conceptual framework concludes by analysing if the CSR activities of theorganisation are: Proactive or reactive, Short term or long term, Local or geographic,and a strategic fit or not.The conceptual framework encompasses the theories above and rates the organisationsCSR score on a scale of one to five (one being the lowest and 5 being the highest). The lowestconceptual model concludes by rating the organisations overall impression of theorganisation CSR activities and a ten point scale.It is important to note that although rigorously based upon the three theories above theanalysis of the CSR activities is objective and subjective in its nature. 7
  8. 8. 4.0 Four CSR StrategiesThis section will now describe and evaluat the key CSR strategies, initiatives and evaluateactions of Marks and Spencer, Tesco, Sainsbury and The Co Co-Op based on the conceptualmodel that has been developed. Figure 4.0 highlights the numerous different forms ofCSR activities.Figure 4.0: CSR Activities CSR Activities Social Activism/ Environmental/ Green Community Corporate Philantropy Corporate Ethically Marketing Involvemnet Source: adapted from McWilliams and Siegel (2001)4.1 Marks and Spencer’s CSR StrategiesUtilising the conceptual framework portrays Marks and Spencer in positive light whenconsidering their overall impression of CSR. Central to the organisations core values isits plan A programme. The company’s dedication to this programme is the prin principalreason it scores highly in the conceptual framework. Mintel (2008) state that M&S has intelcommitted itself to the Plan A strategy despite the current economic downturn. Plan Awas launched in 2007, setting out 100 commitments to achieve in 5 years. Plan Aincorporates the company’s customers and suppliers to “combat climate change, reduce to: combatwaste, use sustainable raw materials, trade ethically, and help customers to lead tradehealthier lifestyles.” (Marks and Spencer, 2010). The company has even appointed a ”director of Plan A to ensure the company stays focused on it. Marks and Spencer outlinefive key elements of Plan A that will be ac achieved by 2012: “Become carbon ecome carbon-neutral,Send no waste to landfill, Extend sustainable sourcing Set new standards in ethical xtend sourcing, ettrading and Help customers and employees live a healthier lifestyle.” (Marks and elp lifestyle.”Spencer, 2010). 8
  9. 9. Marks and Spencer’s commitment to environmental strategies is a key consideration forranking the companies score highly. Marks and Spencer’s have indicated their intentionto reduce their carbon footprint throughout its supply chain. The company has createdtwo state of the art eco factories in Sri Lanka that are at the forefront of energymanagement and onsite energy production highlighting the companies long term andglobal commitment to CSR.Additionally, Marks and Spencer’s had utilised its waste from 38 food stores to powerstores in November 2007, following the development of its first anaerobic digestion plantthis action again highlights its long term commitment to CSR while also suggesting aperfect strategic fit. Furthermore, Marks and Spencer’s can be credited withrevolutionising consumers’ revolt against the use of plastic bags. The introduction ofcarrier bag charging in May 2008 to reduce usage where 5p is now levied on single-usecarrier bags with profits directed to an environmental charity. This strategy has beenreplicated by many competitors within the retail environment and caused the rise ofseveral ‘bag for life’ programmes.Marks and Spencer’s have also opened three next generation eco stores in October 2007with features that result in the store emitting 95% less CO2 and using 55% less energythan other M&S stores. The company announced in June 2008 that about half theinitiatives tested in these stores will be rolled out to all stores and that other initiativeswill be tested further before being developed across the whole estate again emphasisingtheir long term commitment to CSR activities.Marks and Spencer launched a clothing recycling programme in Partnership with Oxfamwhere customers could return unwanted clothing and get a £5 M&S voucher. Industryexperts Mintel (2008) reported that the scheme attracted 234,000 participants betweenNovember 2007 and May 2008 with donated clothes sold by Oxfam topping £1 million inAugust 2008. This CSR activity is a perfect strategic fit with the company’s core 9
  10. 10. competences while highlighting the company’s commitment to its customers andcommunity.4.2 Tesco CSR StrategiesTesco represents a truly globalised company that operates in 12 countries throughoutthe world with global sales of nearly £50 billion (Mintel, 2008). Tesco’s multi-formatretail offering accounts for 12% of all UK retail sales which equates to £1 in every £8being spent in a Tesco store (Mintel, 2008). Analysing Tesco in regards to theconceptual framework sees the retailer receive a high positive score when assessing itsoverall CSR activities. Tesco highlights the key elements of its CSR Strategy as:1. Helping its customers by making green choices more affordable.2. Claims to be setting an example by committing to measuring and making big cuts in its greenhouse gas emissions around the world.3. Working with others to develop new low-carbon technology throughout the supply chain.Tesco score highly on their CSR activities that look to combat environmental issues. Thisis underpinned by their concerted research programme to develop a universally acceptedand commonly understood measure of the carbon footprint of its products frommanufacture to use and disposal. This focus has allowed Tesco to reduce its energyusage by 50% compared to 2000 this action demonstrates the company’s long termstrategy towards CSR. Tesco have halved the cost of energy-efficient light bulbs in storesto encourage consumer take up of the product. Tesco have also successfully recruitedemployees to become ‘energy champions’ who have been extensively trained inenvironmental issues and are found in its superstore format in the United Kingdom andRepublic of Ireland. This CSR activity further emphasise the company’s commitment toits stakeholders mainly its employees but also allows employees to educate itsconsumers. 10
  11. 11. Tesco also scores highly for its ethical sourcing practices within the conceptualframework. Tesco failed to achieve its target of independently auditing 100% of itshigh-risk supplier sites in 2007 (Mintel, 2008). However, it directed increased resourcesto the task in 2008 to raise auditing levels from 73% to 100% showing the company’slong term commitment and focus towards CSR.Tesco also scores highly within the conceptual framework for its sourcing practices. In2008, local produce accounted for £ 2.2% of UK sales, compared with 1.7% the previousyear (Tesco, 2010). Tesco’s long term commitment to sourcing local produces hasbenefited local suppliers for example a local watercress producer in Hampshire saw itssales grow 93% due to this strategy (Tesco, 2010).4.3 Sainsbury CSR StrategiesSainsbury’s operates within the UK and is striving to create and maintain a point ofdifference over Tesco and other rivals by focusing on the quality of its offer. However,Sainsbury’s achieves an identical score to Tesco when considering the overall impressionof their CSR Strategies in the conceptual framework. Sainsbury’s main CSR aims are asfollows:1. Improve energy efficiency.2. Raise colleague awareness of energy costs and environmental impact.3. Transporting products more efficiently by reducing miles travelled by its delivery fleet and using electric vehicles in its home delivery fleet.Within the conceptual framework Sainsbury’s rank highly for its CSR activities especiallyin regards environmental issues. Sainsbury’s has invested in energy efficiency projects,including lighting, refrigeration, heating and ventilation showing the company’s longterm financial commitment to CSR activities. Sainsbury’s have also developed a five-siteenergy and waste study with the Carbon Trust to improve current practice in energy andwaste management. Furthermore, they announced plans to convert 20% of its homedelivery fleet to electric vehicles by 2010 (Mintel, 2008) this justifies the company’s highscore within the conceptual framework for its inbound logistics. 11
  12. 12. In August 2008, Sainsbury’s launched what it claims to be the first monitoring scheme tohelp dairy farmers reduce their carbon emissions. The scheme is certified by the CarbonTrust and aims to reduce CO2 emissions by 10% among 325 participating dairy farms.This CSR activity underscores the company’s long term commitment to CSR activitiesand highlights the strategic fit of its operations.Sainsbury’s has also invested significantly in its store design with the latest conceptstores built from timber and heated by a bio-mass boiler, the store also featuresrainwater harvesting for flushing toilets; minimised heat loss from draughts; lowerlighting levels; and quiet wind turbines (Sainsbury’s, 2010).Sainsbury’s ethical strategy is also an important consideration for the company scoringhighly in the conceptual framework. Sainsbury’s aims to source with integrity in the wayit does business and sells products to ensure that ethical, social and environmentalconsiderations are built into its processes. It is the UK leading fair trade retailer andsells only fair trade bananas this emphasises the company’s global reach of its CSRactivities and its desire to protect its suppliers.Sainsbury’s emphasis on sourcing specific types of products exclusively from Britishproducers, including all rotisserie chickens, all potatoes used in its own-label potatocrisps and all deli counter hams and cooked meats is another consideration for it highscores within the conceptual framework. Furthermore, Sainsbury’s appointed a regionalsourcing team to strengthen its sourcing programme underlining the company’scommitment to its local suppliers and the community.4.4 The Co-operative Group CSR StrategiesThe Co-op has an extensive custom of ethical and Fairtrade supported by its mutualownership arrangement and values. The Co-Op’s values are detailed as “of self-help,self-responsibility and democracy, equality, equity and solidarity.” (Co-OP, 2010).Utilising the conceptual framework to analyse the company sees them score highly inregards to the overall impression of their CSR activities. 12
  13. 13. The Co-op re-launched its brand in 2009 utilising the strapline ‘Good for everyone’ andfocused on its ethical position and ownership by its members.The Co-Ops ethical strategy also ensures they score highly within the conceptualframework. The company are dedicated to ethical sourcing and trading as a componentof sustainable development which extends beyond legislative compliance. The Co-Op iscommitted to increasing the amount of MSC-certified fish available to UK retailers andconsumers and is part of the Co-op’s Responsible Fish Sourcing Policy. Within its ethicalsourcing policies they run a Responsible Fish Sourcing Policy covering canned to freshfish and from ready meals to sandwiches to ensure it doesn’t use any fish from theMSC’s vulnerable stocks list. The Co-Op committed £200,000 over two years to supportMarine Stewardship certification process of UK fisheries. This CSR activity emphasisesthe company’s dedication to various stakeholders such as suppliers and consumers.The Co-Op launched a new ethical policy in 2008 based on a six-month consultation withmembers that found that ethical business and animal wellbeing were the most significanttopics. It immediately switched all its own-brand tea to fair trade product and bannedthe sale of eggs from caged hens. Ongoing review of food supply chain to ensurecompliance with sound sourcing criteria that are embodied into trading agreements.Within the conceptual framework The Co-Op scores highly for its ethical productionprocess this is due to its emphasis on moving its supply base to the adoption of SEDEX(Supplier Ethical Data Exchange) guidelines on assessing supplier compliance with ETIstandards to define its annual auditing programme. The above CSR activities bring tolight the company’s long term commitment to its various stakeholder groups whileensuring the scheme is a perfect strategic fit.The Co-Op has supported the fair-trade movement since its inception in 1994 with thecompany launching its long-term plan to ‘mainstream’ Fairtrade in 1998. This long termcommitment is also a major factor for the company scoring well in the conceptualframework. The Co-Ops partnership with Supreme Creations (the world leading ethical 13
  14. 14. manufacturer of reusable bags) has made the cotton bag on of its most successful CSRactivities.Furthermore, the Co-Op has lobbied to protect the environment and continue theirsupport for Fairtrade. The Co-Ops stance on Fairtrade has created over 2000 jobs withthe average employee earning thirty three percent above the minimum salary which hashad an encouraging result on the neighbouring area. Fairtrade price premiums haveearned over £360,000 which has been used to educate communities and provideunsoiled water (Co-Op, 2010).The Co-Op also philanthropically donated £75,000 to orphaned children in Malawi andIndia which has funded over two hundred years of schooling. This CSR activity isjustification for the company scoring highly within the conceptual framework for itsgeographical focus and support of communities. 14
  15. 15. 5.0 Impact of CSR ActivitiesThis section evaluates the successful impact of the selected retailers CSR activities.Industry analysts Mintel (2008) suggest state that Tesco, Sainsbury’s, Marks andSpencer and The Co-Op are amongst the most successful retailers by Turnover. Thesefigures suggest that there may be a positive relationship between the companies CSRactivities and its performance within the market.Table 5.1: Leading Retailers by TurnoverRetailer 2004/05 2005/06 2006/07 2007/08 £m £m £m £m1. Tesco 27,146.0 29,990.0 32,665.0 34,874.02. J Sainsbury 14,914.0 15,731.0 16,860.0 17,837.03. Asda 14,225.9 14,786.2 15,657.1 nya4. Morrisons 12,103.7 12,114.8 12,461.5 12,969.05. Marks & Spencer 7,034.7 7,275.0 7,977.5 8,309.16. Somerfield 4,676.8 4,554.8 4,369.5 nya7. Co-operative Group 3,016.1 2,983.4 3,037.8 3,676.88. Total Co- 7,692.9 7,538.2 7,407.3 3,676.8 op/Somerfield9. Alliance Boots 4,651.1 5,731.0 5,956.0 nya10. John Lewis 4,757.5 5,149.3 5,698.4 6,052.2 Partnership11. Home Retail Group 5,232.0 5,455.0 5,519.1 5,889.412. DSG International 4,368.0 4,495.2 4,659.7 nya13. Kingfisher 4,277.2 4,172.2 4,409.0 4,395.014. Next 2,660.2 2,901.8 3,029.5 3,054.9 Source: Adapted from Mintel (2008)Table 5.2 highlights the Top four most trusted retailers in the UK according to Mintel’s(2008) consumer research.Table 5.2: Consumer trust in retailers, 2007 and 2008 March 2007 June 2008 % point changeBase: adults aged 15+ 2,068 1,007 2007-081. Marks and Spencer 22 22 -2. Sainsbury’s 23 19 -43. Tesco 28 18 -104. Co-op - 18 - Source: Adapted from Mintel (2008)Table 5.3 highlights consumers trust in retailers and compares this figure to thefrequency that they shop with the retailer (Mintel, 2008). 15
  16. 16. Table 5.3: Consumer trust in retailers compared to usage, June 2008Base: 1,007 adults aged 15+ Used store in last Trust retailer Trust:Use ratio 12 months % %1. Co-op 34 18 1.92. John Lewis/Waitrose 25 12 2.13. M&S 52 22 2.44. Sainsbury’s 55 19 2.95. Asda 52 15 3.56. Tesco 74 18 4.17. Morrisons 45 10 4.58. IKEA 20 4 5.09. Amazon 16 2 8.010. Boots 58 7 8.3 Source: Adapted from Mintel (2008)The above tables can be utilised to suggest the effectiveness and success of the retailerCSR activities.5.1 Marks and Spencer’sMarks and Spencer receives global recognition for its CSR activities by ranking inEthisphere’s 2009 World’s Most Ethical Companies. Furthermore, research by Mintel(2008) states that Marks and Spencer’s have a considerable gap between itself and theother clothing companies. This suggests that all its competitors need to be doing a lotmore to convince customers that ethical sourcing is being tackled properly.Mintel (2008) further concludes that Marks and Spencer’s has one of the highestconsumer ratios regarding trust versus usage (see table 4.3). Suggesting that Marksand Spencer consumers are very receptive to the company’s strong corporatecommitment to it plan A. British Branding Group (2010) reports that Marks andSpencer’s Plan initiative has seen consumers use 70% less carrier bags with threequarters of M&S customers using a substitute product.5.2 TescoTesco scores highly in the conceptual framework and holds the position as the mostsuccessful retailer in terms of turnover (see table 4.1). However, Tesco has suffered asignificant worsening of its trust ratio (see table 4.2) implying that it is not delivering 16
  17. 17. against expectations or is seen as not doing enough. Mintel’s (2008) research showsthat most consumers have purchased goods in Tesco more than any other retailer andstill holds a decent trust versus usage score (see Table 4.3).5.3 Sainsbury’sThe Global 100 Most Sustainable Corporations in the World annual report see Sainsbury’srank 49th. The company scores highly in CO2 productivity and waste productivitysuggesting the broad success of its CSR activities (Global 100, 2010). Furthermore,Sainsbury’s place second in Mintel’s (2008) most trusted retailers survey (see table 4.2).Additionally, the retailer scores highly in Mintel’s (2008) trust versus usage questionfurther underpinning the success of its CSR activities (see Table 4.3).5.4 The Co-OpSimilarly to Marks and Spencer’s, the Co-op, has positive ratios of trust versus usageratio again suggesting that the Co-Op’s consumers are highly receptive to theorganisations CSR activities (see table 4.3). The Co-op is the most trusted company byits shoppers to ‘make a real difference’.However, Mintel (2008) reports that food retailing and distribution is where the most ofits energy use and waste originates, figures indicate that its performance is no betterthan median, which suggests that it has considerably more to do to live up to itsstakeholders’ expectations.The Co-Op is the most decorated retailer in terms of their CSR activities accumulatingvarious awards from independent sources:1. “Retail Weeks Responsible Retailer of the Year was awarded to The Co-operative Food in both 2008 and 2009 (Retail Week, 2009).”2. “The Co-operative Group was awarded the Renewable Energy Associations Pioneer Award 2009 (REA, 2009).”3. “The Co-operative Group is ranked within the UKs 50 Best Workplaces 2009 (Greatplacetowork, 2009).” 17
  18. 18. 4. “In March 2009, The Co-operative Food was rated the number one supermarket for addressing social and environmental issues, for the second consecutive year, in the Concerned Consumer Index (Populus, 2009).”However, an important consideration on future awards must be given to The Co-Op’sacquisition of Somerfield. The acquisition will involve extensive integration in terms ofenvironmental measurement and management, as Somerfield placed very littleimportance to these issues (Mintel, 2008). 18
  19. 19. 6.0 ConclusionsIn conclusion, this essay has briefly discussed the different approaches for measuringCSR through the Lee et al’s (2009) corporate reputation theory. Additionally, Fombrunet al (2000) six-dimensional Reputation Quotient (RQ) was discussed.Furthermore, this essay has developed a conceptual framework to analyse CSRactivities. The conceptual framework is primarily underpinned by Carroll’s (1999)Stakeholder Theory, The Pyramid of CSR (Carroll, 1999) and Porter’s (1985) ValueChain.This essay has successfully described and evaluated the CSR strategies, initiatives andactions of four British retailers: Marks and Spencer, Tesco, Sainsbury’s and The Co-Operative based upon the conceptual framework developed.Finally, the essay has concluded by evaluating the impact of these CSR activities basedon observable evidence. Research by industry experts Mintel (2008) highlights thesuccess that the selected retailers have had in their CSR activities. Marks and Spencerreceives global recognition for its CSR activities by ranking in Ethisphere’s 2009 World’sMost Ethical Companies. Tesco has suffered a significant worsening of its trust ratio (seetable 4.2) implying that it is not delivering against expectations or is seen as not doingenough. The Global 100 Most Sustainable Corporations in the World annual report seeSainsbury’s rank 49th. Co-Op is the most decorated retailer for its CSR activities winningcopious awards such as Retail Weeks Responsible Retailer of the Year was awarded inboth 2008 and 2009 (Retail Week, 2009). 19
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  24. 24. Appendix i – Principles of CSRCarroll (1991) Principles of CSR:Level Main Components: It is important…Economic To perform in a manner consistent with maximising earnings per share To be committed to being as profitable as possible To maintain a strong competitive position To maintain a high level of operational efficiency That a successful firm be defined as one that is consistently profitable.Legal To perform in a manner consistent with expectations of government and the law. To comply with various national and supra-national laws and regulations. To be a law-abiding corporate citizen. That a successful firm be defines as one that fulfils its legal obligations. To provide goods and services that at least meet the minimal legal requirements.Ethical To perform in a manner that is consistent with the expectations of societal mores and ethical norms. To recognise and respect new or evolving ethical/moral norms adopted by society. To prevent ethical norms from being compromised in order to achieve corporate goals. That good corporate citizenship is defined as doing what is expected morally or ethically. To recognise that corporate integrity and ethical behaviour go beyond mere compliance with laws and regulations.Philanthropic To perform in a manner consistent with the philanthropic and charitable expectations of society. To assist the fine and performing arts. That managers and employees participate in voluntary and charitable activities within their local communities. To provide assistance to public and private educational institutions. To assist voluntarily those projects that enhance a community’s ‘quality of life’. Source: Adapted from Carroll (1991) 24
  25. 25. Appendix ii – Marks & Spencer and Tesco Company 1 Company 2 Marks and Name of company Spencer Tesco (rate all item on 5-point scales, 1 being the lowest) Useful Benefit 5 5 Mission Statement 5 5 Stakeholders (overall assessment) 4 Employees 4 5 Customers 4 4 Suppliers 5 3 Shareholders 4 5 Environment 5 4 Community 5 5 Government 4 3 Social Activist Groups 3 3 Primary Activities (overall assessment) 3 4 Transport (Inbound Logistics) 4 4 Materials 5 5 Parts from Suppliers 4 3 Ethical Practice Towards Suppliers 5 3 Energy 5 3 Efficiency 5 5 Waste Management 5 4 Ethical Production Practice 5 4 Transport (Outbound Logistics - Distribution) 3 4 Packaging 3 4 PR / Advertising 3 3 Privacy, Confidentiality, Ethics in Market Research 2 4 Pricing Practice 3 3 Ethical Selling Practice 3 4 Consumer Information 3 5 Feedback 3 4 Lifecycle Management of Products 4 4 Support Activities (overall assessment) 3 5 R&D - Product / Service Innovation (If the product itself as well as the process of making & disposing the product is Eco-friendly) 4 4 External Links (Universities, Research Institutes) 2 2 Ethical Research Practice / Product Testing 3 5 Transparency, Code of Conduct 5 4 Financial Reporting, Accounting Standards 5 5 Lobbying 1 4 Governance 2 4 Employee Welfare & Benefits (e.g. Insurance, Social Benefits, etc.) 3 5 Health & Safety Issues 3 5 Training Opportunities 3 5 Policy towards Lay-Offs 4 5 Diversity 4 5 Economic Responsibility 4 5 Legal Responsibility 5 5 Ethical & Environmental Responsibility 5 4 Philanthropy 4 3 25
  26. 26. (1) Proactive … (5) Reactive CSR Strategy 2 2Time Horizon (1) Short Term … (5) Long Term 5 5Geographic Focus: (1) Local … (5) Global 5 5Strategic Fit: 1=perfect fit … 5=total misfit 1 1(rate on 10-point scales, 1 being the lowest)Overall Impression of CSR Activities 9 8Annual Sales (2008 year) 712.9M 58,588Annual Sales (2009 year) 897.8M 59,426EBIT 2008 (=earnings before interest and tax) 1007.1M 2,803EBIT 2009 604.4M 2,954Stock Price (1.1.2009) 221.00P 365.20pStock Price (1.1.2010) 412.40p 412.05pStock Price (1.3.2010) 330.10p 419.70p 26
  27. 27. Appendix iii – Sainsbury’s and The Co-Op Company 3 Company 4 Name of company Sainsbury The Co-Op (rate all item on 5-point scales, 1 being the lowest) Useful Benefit 4 4 Mission Statement 5 5 Stakeholders (overall assessment) 5 Employees 4 5 Customers 5 4 Suppliers 4 5 Shareholders 5 5 Environment 5 5 Community 4 5 Government 4 5 Social Activist Groups 3 4 Primary Activities (overall assessment) 4 5 Transport (Inbound Logistics) 4 4 Materials 5 5 Parts from Suppliers 5 5 Ethical Practice Towards Suppliers 4 5 Energy 3 4 Efficiency 4 5 Waste Management 4 5 Ethical Production Practice 5 5 Transport (Outbound Logistics - Distribution) 4 4 Packaging 5 5 PR / Advertising 4 4 Privacy, Confidentiality, Ethics in Market Research 3 4 Pricing Practice 4 4 Ethical Selling Practice 4 5 Consumer Information 5 5 Feedback 4 4 Lifecycle Management of Products 4 5 Support Activities (overall assessment) 4 4 R&D - Product / Service Innovation (If the product itself as well as the process of making & disposing the product is Eco-friendly) 3 4 External Links (Universities, Research Institutes) 2 2 Ethical Research Practice / Product Testing 3 5 Transparency, Code of Conduct 3 5 Financial Reporting, Accounting Standards 4 5 Lobbying 2 5 Governance 3 5 Employee Welfare & Benefits (e.g. Insurance, Social Benefits, etc.) 4 5 Health & Safety Issues 4 5 Training Opportunities 4 4 Policy towards Lay-Offs 4 4 Diversity 5 4 Economic Responsibility 4 5 Legal Responsibility 5 5 Ethical & Environmental Responsibility 5 5 Philanthropy 3 4 (1) Proactive … (5) Reactive CSR Strategy 2 1 27
  28. 28. Time Horizon (1) Short Term … (5) Long Term 5 5Geographic Focus: (1) Local … (5) Global 4 5Strategic Fit: 1=perfect fit … 5=total misfit 1 1(rate on 10-point scales, 1 being the lowest)Overall Impression of CSR Activities 8 10Annual Sales (2008 year) 19287M 5079.5MAnnual Sales (2009 year) 20383M 6655.5MEBIT 2008 (=earnings before interest and tax) 17837M 3953.9MEBIT 2009 18911M 5720.4MStock Price (1.1.2009) 336.50p 118.00pStock Price (1.1.2010) 324.20p 131.75pStock Price (1.3.2010) 330.40p 128.25p 28