Discuss about the Managing Corporate Social Responsibility.
Domino’s Pizza Enterprises Limited is considered to be the biggest pizza chain in Australia and is a part of the ASX Top 100 companies. The operations of the company were started in Australia in the year 1983. Domino’s also became one of the first publicly listed fast food chain in the country. The number of stores that are operated by Domino’s in Australia have given the company the topmost position in the entire market. The organization has also become one of the largest franchisee operators in Australia for the brand of Domino’s. The Domino’s Pizza Enterprise or DPE has a large network of stores in many other countries like, New Zealand, France and Belgium. The organization has been able to capture the pizza market of Australia in an effective manner with the help of its large network within the country (Dominos.com.au. 2018).
The report is mainly based on the corporate social responsibility based activities that have been performed by the company. The various CSR based issues that have been faced by the company during the course of its operations will be analysed in the report with the help of different frameworks.
Domino’s Pizza has actively taken part in the social responsibilities that they have and the ways by which the people in the community can be benefitted from the activities of the company. The organization is thereby committed towards providing its support to the communities of Australia with which they are working at present. The company has always taken pride in providing its contribution for the purpose of being socially and ethically responsible in nature (Bhattacharya et al. 2017). The program that has been introduced by Domino’s to achieve its social objectives is named as, “Domino’s Give for Good Program” in the communities of the country. The philosophy of the company behind the fulfilment of the social responsibilities are,
The organization mainly provides its support to many organizations which are charitable in nature and have aimed to support the various communities in the country as well. Domino’s has partnered its operations with the Foundation for Rural and Regional Renewal for the purpose of supporting regional, rural and many remote communities with various projects. The various issues that are being analysed by the company in this case are mainly the preparedness for disasters, the creation of jobs and the employment of youth (Carroll 2015).
Domino’s has also introduced a program which is known as “Round Up For Charity”. The customers are requested to round up their payment to the next dollar. The amount that is collected from the customers in this manner is further used for providing educational opportunities to children. The initiatives that are taken by the company for disaster relief are also supported with the amount that is collected. The “Give for Good” charity was established in the year 2016 for supporting the communities in Australia. Another initiative that was taken by Domino’s Pizza is named as, “ Doughraiser Fundraiser”. This was an initiative that was taken by the company in the aim to provide support to the local communities in different areas of Australia (Cherney and Blair 2015).
The corporate governance of Domino’s Pizza is at the heart of the successful operations of the company in Australia. The governance of the company is mainly related to the ways by which the provisions and the principles of Financial Reporting Council are followed. The different policies and principles that are set by the management need to be followed by the employees of the company. The principles and the policies are set for the purpose of ensuring proper corporate governance within the company. The Board members of Domino’s are mainly responsible for the creation of proper regulations which further need to be followed by the employees. The corporate governance of the company plays an important role in the achievement of the goals and the targets that are set by Domino’s (Clapp and Rowlands 2014). The Board meetings take place eight times within a particular year. The structure of the board is formed in such a manner which ensures that all the members have similar responsibilities and rights. The individual members of the board are not capable of dominating the decisions that are taken for the company. The roles and the responsibilities of individual group members are provided to them so that they do not face any competition based on this. Domino’s has given importance to the diversity based factor and the ways by which it affects the successful operations of the company (Den Hond, de Bakker and Neergaard 2016). The greater level of gender diversity is the most important factor of the board of Domino’s. The higher levels of diversity have thereby been able to affect the ways by which the decisions are taken by the board. The quality of corporate governance is based on the levels of diversity that is present in the board of Domino’s. The organization has thereby been successful in creating an effective corporate governance structure which has helped in successful implementation of the policies and regulations (Dhaliwal et al. 2014).
The CSR based responsibilities that are a part of Carroll’s CSR Pyramid include, economic, legal, ethical and philanthropic types. The key features that form a major part of the CSR pyramid are that CSR is mainly built on the profits that are gained by the company. The next major importance of CSR is related to the ways by which the organization is able to comply with the regulations and the laws. The third feature is based on the ethical duties that need to be maintained by the company. The economic responsibilities of the pyramid are the most important part of the pyramid (Flammer 2015). The base of the entire pyramid is related to the economic responsibilities that needs to be fulfilled by the modern organizations. The legal responsibilities of the pyramid are mainly based on the levels up to which the company is able to obey the regulations and laws. The laws that need to be followed by the company in this case are mainly related to the health and safety related laws, the employment based laws and the competition. The ethical responsibilities are based on the responsibility that the company has to act in an ethical and moral way (Harjoto, Laksmana and Lee 2015). The business organization thereby needs to go beyond the requirements of the law. The philanthropic stage is based on the responsibilities of the organization that are based on the ways by which it can give back something to the society. This responsibility is important to enhance the reputation of the company in the industry.
The initiatives that have been taken by Domino’s to improve the communities is based on the increase of the profitability of the company. The economic benefits that are provided to Domino’s with the help of the social responsibilities are mainly based on the enhancement of the reputation of the organization. This has helped Domino’s to survive in the environment for a longer term. The legal responsibilities have also been fulfilled by the company by fulfilling the social duties (Kang, Germann and Grewal 2016). The organization has always aimed at complying with the regulations that are set by the authorities in order to operate in a profitable manner in the industry. The ethical duties have been fulfilled by the organization with the help of the ways by which it is able to provide enough support to various communities with the help of initiatives that have been taken by the company. Domino’s has been trying to go beyond the laws in order to fulfil the duties that the company feels is important for improving the conditions in which the communities stay. The organization has also been successful in giving back the benefits to the customers who are a part of the operations (Korschun, Bhattacharya and Swain 2014). The various initiatives that have been taken by Domino’s are based on the ways by which the company is able to provide some part of the profits for the improvement of the communities in Australia.
Domino’s has become the largest pizza chain in Australia within the short period of time. This has been possible with the help of its large network and huge number of franchisees all across Australia. The company has however been blamed for following another large franchisee based organization in Australia named 7-eleven. Domino’s has been accused with the issues that are related to low wages that are provided to the employees. The organization has also faced issues based on the ways by which the franchisees are squeezed for profits (Moscato 2017). The store managers were accused of reducing the number of working hours of the workers so that the pay can also be reduced accordingly. The company had not been following the basic laws related to providing appropriate wages to the employees. Many complaints that have been placed against some of the store managers for the ill practices that were undertaken by them was not addressed by the head office of the company accordingly. Domino’s has been compromising with the wages that are provided to the workers in the hundreds of stores all over Australia (Ruggie 2017). The investigation that has been conducted by Fairfax Media had revealed that the problem of underpayment of wages had been a deliberate attempt from the side of management of Domino’s. The stress that had been faced by the employees who were a part of the franchisee stores of Domino’s was immense. The company had been constantly reducing the wages of employees for the purpose of increasing the profits. The employees were not happy with the ways by which they were treated by the upper level managers (Saeidi et al. 2015). The net profit of Domino’s has been increasing every year due to the savings that were made by the company by providing half wages to the employees. Domino’s has been successful in its operations after the company was listed in ASX in the year 2005 itself. The main reason behind the success of the company are the success that was experienced by the franchises. The revenues that were generated by the company was due to the wrong measures that were taken by Domino’s based on the wages provided to employees (Salib et al. 2015).
The stakeholders of Domino’s are the customers and the employees as well. The company has been successful in making the customers happy with the discounted products and high levels of service. However, the employees were not provided with adequate amounts of wages and other benefits which made it difficult for them to survive. The gaps that had occurred between the wages that were expected and actual wages provided had caused huge stress for the employees. The various investigations that were undertaken by institutions had proved that Domino’s has been exploiting the employees for their own profits. The employees were stressed out due to this and the weak governance of the company was a major reason behind the issues that were faced by Domino’s (Wu et al. 2015).
Conclusion
The report can be concluded by stating that the corporate social responsibility based activities of an organization have an effect on the profitability. The modern organizations therefore need to fulfil their social responsibilities so that the reputation can be maintained in the market effectively. The company that has been analysed in this report is Domino’s Pizza Australia. The company is listed in the ASX Top 100 and has been able to maintain a good position in the Australian market from the start of its operations. The organization had taken many initiatives to fulfil the social responsibilities towards the communities in Australia. However, many allegations were raised against the management for providing low wages to the employees who worked in the franchisees. The stress levels of the employees were increased and they were not able to work in a productive manner.
References
Bhattacharya, C.B., Korschun, D., Sen, S. and Routledge, H., 2017. Corporate social responsibility. Journal of International Law, 26(2).
Carroll, A.B., 2015. Corporate social responsibility. Organizational dynamics, 44(2), pp.87-96.
Chernev, A. and Blair, S., 2015. Doing well by doing good: The benevolent halo of corporate social responsibility. Journal of Consumer Research, 41(6), pp.1412-1425.
Clapp, J. and Rowlands, I.H., 2014. Corporate social responsibility. The Essential Guide to Global Environmental Governance. Routledge: London, pp.42-44.
Den Hond, F., de Bakker, F.G. and Neergaard, P., 2016. Introduction to managing corporate social responsibility in action: Talking, doing and measuring. In Managing Corporate Social Responsibility in Action (pp. 15-26). Routledge.
Dhaliwal, D., Li, O.Z., Tsang, A. and Yang, Y.G., 2014. Corporate social responsibility disclosure and the cost of equity capital: The roles of stakeholder orientation and financial transparency. Journal of Accounting and Public Policy, 33(4), pp.328-355.
Dominos.com.au. (2018). Domino’s Pizza | Order Pizza Delivery Online | Food Delivery & Takeaway. [online] Available at: https://www.dominos.com.au/ [Accessed 18 Jun. 2018].
Flammer, C., 2015. Does corporate social responsibility lead to superior financial performance? A regression discontinuity approach. Management Science, 61(11), pp.2549-2568.
Harjoto, M., Laksmana, I. and Lee, R., 2015. Board diversity and corporate social responsibility. Journal of Business Ethics, 132(4), pp.641-660.
Kang, C., Germann, F. and Grewal, R., 2016. Washing away your sins? Corporate social responsibility, corporate social irresponsibility, and firm performance. Journal of Marketing, 80(2), pp.59-79.
Korschun, D., Bhattacharya, C.B. and Swain, S.D., 2014. Corporate social responsibility, customer orientation, and the job performance of frontline employees. Journal of Marketing, 78(3), pp.20-37.
Moscato, D., 2017. Corporate Social Responsibility. The Handbook of Financial Communication and Investor Relations, First Edition, pp.221-231.
Ruggie, J.G., 2017. The theory and practice of learning networks: Corporate social responsibility and the Global Compact. In Learning To Talk (pp. 32-42). Routledge.
Saeidi, S.P., Sofian, S., Saeidi, P., Saeidi, S.P. and Saaeidi, S.A., 2015. How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of Business Research, 68(2), pp.341-350.
Salib, J., Sun, D., Wu, J., Wen, X. and Huang, C.C., 2015. Corporate Social Responsibility.
Wu, L.Z., Kwan, H.K., Yim, F.H.K., Chiu, R.K. and He, X., 2015. CEO ethical leadership and corporate social responsibility: A moderated mediation model. Journal of Business Ethics, 130(4), pp.819-831.
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