CSR Case Studies

Presented by

Artem Sinelnikov (Student ID: 32922)

Sahr Koroma (Student ID: 25932)

Isaak Babalola (Student ID: 25315)

Nelson Fernandes (Student ID: 25976)

Lecturers: Corina Chin

Submission Date: 31st March 2014

What is CSR?According to Howard Bowen, CSR is ''an obligation of businessman to pursue those policies, to make those decisions, or to follow those lines of action that are desirable in terms of the objectives and values of our society'' (Bowen, 1953).

However, Milton Friedman in 1962 championed the idea that the only obligation a business has is to increase its profit.

Business EthicsAccording to Paul Taylor, ethics is ''an inquiry into the nature and grounds of morality'' (1975, p.1). He further defines morality as ''moral judgements, standards and rules of conduct'‘.

David Boddy (2010) also outlines 4 main approaches to what is ethical:

Moral Principles Human Rights Utilitarianism Individualism

International Code of Ethics, developed in 1994 in Switzerland, is governed by 7 main principles (Kreitner, 2009):

Responsibility of Business Economic and Social impact of business Business behaviour Respect for rules Support for multilateral (free) trade Respect for the environment Avoidance of unethical practices

Stakeholder Analysis and Mapping

''Stakeholder analysis is the process of identifying the individuals or groups that are likely to affect or be affected by a proposed action, and sorting them according to their impact on the action and the impact the action will have on them’’ (Larson, 2011)

Aims

To identify most influential stakeholders To identify stakeholder orientation To recognise social, economic and political trends

Application

To help shape potential strategies To win over antagonistic stakeholders

Interest

Power

Managers and DirectorsSharehold

ersCore Suppliers

Other Suppliers

EmployeesCommunities

Customers The Media

MorrisonsConflict

1. Shareholders

Sale of property without consulting shareholders (The Telegraph, 2014)

2. Community

Noise pollution from main stores

3. Customers

Short-time returns policy

4. Suppliers

No supplier logistics support

5. Employees

Stores overstaffed

Related CSR Policies

1. Regular shareholder meetings

2. Creation of 'Let's Go' children's program

Tackling social exclusion

Supporting charities

3. Promoting healthy lifestyles

Affordable prices

Honest product information

4. Working closely with farmers

Encouraging fair conditions at home and abroad

Enhanced construction Health & Safety

5. Morrisons Academy training

Hardship fund

Fair internal promotions

Marks & SpencerConflict

1. Shareholders

Overly enthusiastic yearly report (M&S, 2013) takes focus away from the company's debt

2. Community

Closing unprofitable stores in ROI (BBC, 2003)

3. Customers

87% rise in profits (M&S, 2013) did not result in savings for the customers

4. Suppliers

Short notice termination of supplier agreements (BBC, 2000)

5. Employees

Cutting staff redundancy benefits by 25% (PersonnelToday, 2008)

Related CSR Policies

1. Producing a detailed governance report at the end of each year

Ensuring high levels of sustainability to increase profitability

2. Internships

Charity and community funding under Plan A

1% of company's profits is donated to charitable projects

3. Collecting customer feedback on Plan A activities

Reducing the amount of salt and fat in M&S products and introducing healthier products

Protecting customers' personal data

4. Suppliers are involved in training and education

Assisting suppliers in providing high standards of animal welfare

Fairtrade

5. Generous employee performance rewards

M&S employee retirement club

TescoConflict

1. Shareholders

UK shareholders suffering loss of profit (Financial Times, 2013)

2. Community

Superstores defacing historic UK landmarks (The Telegraph, 2013)

3. Customers

Sale of horse meat scandal (BBC, 2013)

4. Suppliers

Demanding cash from suppliers to cover profit losses (The Guardian, 2013)

5. Employees

24-hour working shifts in parts of S. Korea and Thailand (BBC, 2014)

Related CSR Policies

1. Consulting shareholders on all strategic decisions

Annual shareholder meetings

2. Charity work and own food banks

Promoting internships

Tackling the global obesity crisis

3. Honest nutrition labelling

Long opening hours

Affordable healthy products policy

4. Suppliers are involved in the decision making process

Supporting fair trade

5. Tesco leadership and business management training

Diversity advisory group

ASDAConflict

1. Shareholders

No apparent conflicts

2. Community

Sale of cheap alcohol to the public (The Alcohol Academy, 2011)

3. Customers

Using misleading sales tactics (BBC Panorama, 2011)

4. Suppliers

Forcing suppliers to trade at below-market prices (The Independent, 2010)

5. Employees

Bribing employees out of union membership (Glatuc, 2006)

Related CSR Policies

1. 3 Interactive shareholder meetings in addition to the regular annual meetings (ASDA, 2013)

2. Supporting government anti-alcohol campaign in Scotland

3. Introduced price information per unit of weight

Launched ASDA price guarantee (Price match)

Long opening hours

Affordable healthy products policy

4. Supplier development program

Supporting small and medium sized farmers

5. Supporting workers' freedom of association

Working closely with Unions

Disaster relief effort with Japanese unions by parent company Wallmart

ComparisonStrong involvement with local communities

Focus on customers

Supporting employees in trouble

Support for suppliers at home and abroad

Failure to consult shareholders on certain issues

Improved profit reporting

Strong attention on customer satisfaction

Very strong focus on suppliers following previous criticism

Improved employee rewards and job security after recession

Insufficient effort in retaining the UK customer base

Quick response to shareholder needs

New supplier rules after the horse meat scandal

Positive response to the supplier concerns

Poor communication with communities

More focus on training, but issues remain in S. Korea

Strong focus on shareholders despite lack of apparent conflicts

Solid effort towards fairer pricing

Strong response to the union scandal

Weak response to bullying tactics allegations

Little community effort despite criticism

The Conclusion

The authors have looked at 4 large companies operating in the UK and abroad and the conflicts they have had with their stakeholders in the past 10 years. Almost every one of these conflicts led to the development of CSR policies aimed at diffusing the situation and preventing the conflict from happening again in the future.

It has also been noted that 3 out of 4 companies made strong efforts to keep their key stakeholders happy by responding swiftly to their ethical concerns. However, they displayed different degrees of commitment to their less influential stakeholders.

Finally, the authors concluded that Marks & Spencer currently has the most complete CSR policy, covering the widest range of environmental and social issues around the world.

Felsted, A. 2013. Tesco shareholders question management’s grip after profits fall - FT.com. [online] Available at: http://www.ft.com/cms/s/0/bb8bd7aa-34f4-11e3-8148-00144feab7de.html#axzz2xHtNsFCS [Accessed: 28 Mar 2014].

BBC News. 2000. M&S sued by supplier. [online] Available at: http://news.bbc.co.uk/1/hi/business/598435.stm [Accessed: 27 Mar 2014].

BBC News. 2009. Marks and Spencer cuts 1,000 jobs. [online] Available at: http://news.bbc.co.uk/1/hi/7812917.stm [Accessed: 20 Mar 2014].

BBC News. 2013. Four M&S shops to close in Republic. [online] Available at: http://www.bbc.co.uk/news/world-europe-23598678 [Accessed: 27 Mar 2014].

BBC News. 2013. Tesco publishes horsemeat apology. [online] Available at: http://www.bbc.co.uk/news/uk-21054688 [Accessed: 28 Mar 2014].

BBC News. 2014. Tesco labour relations under fire. [online] Available at: http://news.bbc.co.uk/1/hi/business/8127477.stm [Accessed: 25 Mar 2014].

BBC Panorama. 2011. [TV programme] BBC, channel 1, 5th December 2011.

Beyond 50 years: building a sustainable future. 2012. [e-book] ASDA-Wallmart. p. 39. Available through: ASDA.com http://your.asda.com/system/dragonfly/production/2012/04/17/10_38_46_632_WMT_2012_GRR.pdf [Accessed: 28 Mar 2014].

Boddy, D. (2010) Management. [S.l.]: Financial Times Prentice.

Bowen, H. Social Responsibilities of the Businessman. New York: Harper and Row, 1953

Butler, S. 2013. Tesco accused of squeezing suppliers to support its profits. [online] Available at: http://www.theguardian.com/business/2013/nov/28/tesco-accused-of-squeezing-suppliers [Accessed: 28 Mar 2014].

Code of Ethics and Behaviours. 2012. [e-book] Marks & Spencer. pp. 5-7. Available through: Marks & Spencer http://corporate.marksandspencer.com/documents/specific/investors/governance/code_of_ethics.pdf [Accessed: 16 Mar 2014].

Corporate responsibility review 2011-2012. 2012. [e-book] Available through: Morrisons Corporate http://www.morrisons-corporate.com/Documents/Morrisons_CR_Review_5MB.pdf [Accessed: 28 Mar 2014].

Friedman M., Capitalism and Freedom, Chicago, University of Chicago Press, 1962.

Glatuc. 2006. ASDA found guilty of anti trade union activity. [press release] 10 February 2006.

Kreitner, R. 2009. Management. Boston: Houghton Mifflin Co.

References

Larson, E. W., Gray, C. F. and Gray, C. F. 2011. Project management. New York: McGraw-Hill Irwin.

Logan, G. 2008. Redundancy pay cut by 25% as Marks & Spencer denies cutting costs. [online] Available at: http://www.personneltoday.com/hr/redundancy-pay-cut-by-25-as-marks-spencer-denies-cutting-costs/ [Accessed: 20 Mar 2014].

Marks and Spencer. 2014. Marks & Spencer: Plan A - What we're doing. [online] Available at: http://plana.marksandspencer.com/we-are-doing [Accessed: 16 Mar 2014].

Martin, B. 2014. Morrisons under fire as activist investor revealed . [online] Available at: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10581962/Morrisons-under-fire-as-activist-investor-revealed.html [Accessed: 25 Mar 2014].

Philipson, A. 2013. Historic market town in Dorset becomes latest community to battle Tesco over superstore plans - Telegraph. [online] Available at: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9902738/Historic-market-town-in-Dorset-becomes-latest-community-to-battle-Tesco-over-superstore-plans.html [Accessed: 28 Mar 2014].

Simpson, J. and Taylor, J. 2013. Corporate governance, ethics, and CSR. London: Kogan Page.

Sustainability Policy and Targets to 2015. 2013. [e-book] Available through: ASDA http://your.asda.com/system/dragonfly/production/2013/11/21/10_28_40_945_ASDA_SUSTAINABILITY_POLICY_GOALS.pdf [Accessed: 28 Mar 2014].

Tesco and Society 2013. 2013. [e-book] Available through: Tesco http://www.tescoplc.com/files/pdf/reports/tesco_and_society_2013_ipad.pdf [Accessed: 28 Mar 2014].

Taylor, P. W. 1974. Principles of ethics. Encino, Calif.: Dickenson Pub. Co.

The Independent. 2010. Leaked memo reveals how Asda sought to beat down suppliers. [online] Available at: http://www.independent.co.uk/news/business/news/leaked-memo-reveals-how-asda-sought-to-beat-down-suppliers-2102448.html [Accessed: 28 Mar 2014].

Wood, D.J. (1991) Corporate Social Performance Revisited. Academy of Management Review 16, 691-718.

References