The Impact Of Corporate Social Responsibility On Business Performance: A Case Study Of Woolworths

Conceptual Framework

Schwartz(2017) defines corporate social responsibility as the operational methods of operations of business organizations in which they modify their methods of operations to benefit the society besides earning profits. The business organizations today adopt corporate social responsibilities to exhibit their responsibilities as members of the society. They perform various activities to contribute the welfare of the society and environment.

Grayson and Hodges (2017) points out that points out that corporate social responsibilities enable organizations to boost their business. The researcher would visit this important relationship between corporate social responsibilities and business generation. The researcher in order to render a a stronger base to his research would consider Woolworths, the leading Australian retail chain as the crux of study.

Organization of the project:

            The organization the researcher has chosen for his research is the largest retail chain in the Australian retail industry, Woolworths, the retail subsidiary of the Australian business conglomerate, Woolworths Group. The supermarket chain is based on New South Wales, Australia and has over nine hundred stores in Australia. The product line of the retail chain consists of fruits and vegetables, dairy products, meet products, non-alcoholic drinks, alcoholic drinks, baby food and skincare products. The retail chain adopts corporate social responsibilities as a part of its core business strategies. This is evident from the very product line of the supermarket store.

The supermarket sells a variety of organic products which includes meat products, skincare products and food products (woolworths.com.au, 2018). The supermarket charges higher prices for these locally made organic products compared to the inorganic products. This ensures that the supermarket chain is able to give higher returns to the local producers and bring about their economic development. The supermarket and its business conglomerate mother company raise funds to help farmers in Australia suffering from drought. These strong applications of corporate social responsibilities have strengthened the brand power of the retail besides establishing it as the leader in the Australian retail sector. This strong relationship between the core business of Woolworths and its CSR has made it a worthy substratum to base the research on.

Conceptual framework:

Corporate social responsibilities enable organizations to strengthen their market goodwill. The organizations like retail chains sell organic products which they acquire the local farms. They organic products like beef and fruits enable the local agriculturists to sell their products to international retail chains and earn higher revenue. Thus CSR enable retail chains to bring about economic development among the local population which strengthens their goodwill.

Research Aim

Research aim:

            The aim of the research is to study the relationship between business generations in business companies and their corporate social responsibilities. Kolk (2016) mentions that corporate social responsibilities carried out by the organizations enable the companies to contribute to social development. However, Epstein (2018) points out those corporate social responsibilities today enable business organizations to strengthen their goodwill which ultimately help in generation of business. It is which relationship between CSR and business generation which the researcher would explore. 

Research question:

            The question on which the research would stand on in its entirety is:

1. Why are corporate social responsibilities a must for the business? Or, what is the necessity of Corporate Social Responsibilities in business?

Preliminary literature review:

Corporate social responsibility models:

            AsperSchwartz (2017) corporate social responsibility refers to the concept that the business organizations today as important members of the society strives to bring about its development. The business organizations today contribute towards social development in association with government bodies or solitarily. They support various social initiatives like raising funds to help the farmers and recycling wastes to reduce their harmful impacts on the environment (Ni & Van Wart, 2015).

Traditional conflict model:

            Fairlie and Svergun (2015) point out tht the traditional corporate social responsibilities model can be defined as the model which considers social responsibilities to be in conflict with the interests. This can be attributed to several factors which dominate the extremely competitive retail sector of markets like Australia. First, the retail chain require immense capital to operate which is not feasible for a private limited company or a sole proprietorship firm. This can also be attributed to the fact the leading retail chains are subsidiaries of holding which are listed on the ASX.

Flannery (2016) point out that this means that leading retail chains are able to sources capital from the market and their operations are largely dependent on the support of the investors. This places legal and ethical obligations on the retail chain to bring about maximization of the capital of the shareholders. This has two positive impacts on these retail chains. First, this advertise the financial strengths of the retail chains and secondly, attract more investments. Malmendier and Tate (2015) point that social services do not earn financial income and hence does not apparently lead to maximization of the shareholders’ funds. That is why the traditional conflict model considers the corporate social responsibilities as a violation of shareholders’ interests. The model, in other words does not consider CSR as a part of the core business strategies since it does not earn financial profits.

Research Question

Added value model:

            The added value model of CSR as Jamali, El Dirani and Harwood (2015) point out stands on the belief that though CSR does conflict with the shareholders’ interests; it also helps to generate new revenue to certain extent. Rangan, Chase and Karim (2015) point out that this model, though not completely, contradicts the traditional conflict model of CSR. While the traditional conflict model focuses on the shareholders’ interests of capital maximization, it does not explore the motivators of investments.

Ding, Au and Chiang (2015) while opposing the traditional conflict model points out that though investors consider capital maximization while making investment decisions, it is not the only investment criteria. The investors take into consideration factors like goodwill of the companies and its future revenue generation capability. Wellhausen (2015) points out that this model though does not openly addresses CSR as a core business component, accepts its significant role in business generation. This is because CSR enables organizations create strong market goodwill which enables them to attract more business partners including customers.

It can also be the goodwill is an asset which firms show on their balance sheets and have tremendous importance in measuring their value capture. Seabrooke and Wigan (2017) mention that retail chains today hold their own trademarks. They employ asset management firms to manage their goodwill and IPRs. Thus, it is evident from the discussion that though CSR does not generate profits according to added model theory, it paves path of business generation.

Multiple goals model:

            The multiple goals model of corporate social responsibilities as Hossain and Al-Amin (2016).point out finally accepts corporate responsibilities as a significant component of the business operations. Wong and Dhanesh (2017) point out that this model contradicts with the traditional conflict model. The model in fact points out that investors do not take into consideration the present profit generation but also the future sustainability of the retail chains. They consider factors like market goodwill and revenue generation capability of the products the firm markets.

They also take into account factors like acquisitions and mergers and supply chain management of the retail chains. This is where corporate social responsibility steps in to ensure the investors gain high profits (Rebai, Azaiez & Saidane, 2016). The involvement in the CSR models enables the retail organizations participate in social development which strengthens their businesses. Thus, it can be inferred from the analysis brings about more business generation.

Preliminary Literature Review

CSR and contingent planning:

            Jiang et al. (2018) points out that CSR enables retail chains to create a contingency and tide over challenges like economic downturns. Wong and Dhanesh (2017) point out in this respect that the retail chains are facing hostile situations. Their CSR act as goodwill instrument and help to attract business. Consumers buy products from retails they trust due to low availability of income during economic disturbances. The goodwill and the customer loyalty of the retail chains enable them to attract consumers. Thus, CSR helps business organizations generate business during tough times and serves as a part of their contingent plan. Thus, it can be inferred from the discussion that CSR boosts the generation of business in companies.

Research methodology:

            The nature of the study is the most important element in the research. It prepares the ideal base for the preparation of the methodology of the following study. The methodology part helps to describe in detail about the different types of methods and processes to derive the way of deriving the results of the research and also to derive the different strategies of the research. The use of qualitative and quantitative data will help to derive the results of the research.

Research Design

            The following research will be completed by means of the analytical or descriptive research design. The research design will be chosen over the other two methods as because the following method will be helpful to derive the results of the research by the analysis of the different related theories and concepts related to the following topic. The following process will help the researcher to gain an in depth understanding of the research.

Reliability and Validity

            `The reliability and validity of the information that will be collected to complete the following research will be very much essential for the success of the business. The validity of the research methods will be tested and measured according to the different types of the research standards. The reliability of the information used in the research will make way for the success of the research.

Sampling

            The sampling for the quantitative and the qualitative process will be collected via the purposeful sampling method where the organization where there is large demand for the practical knowledge of the different kind of methods.

Sample Size

            The sample size will consist mainly of the different managers and directors of business organizations who will be chosen as the research participants in the research. The numbers will be limited because of the budget constraints.

Corporate Social Responsibility models

Data Collection method

            The data will be collected by performing interviews and focus groups. The interviews will be online based where questionnaire will be provided to the recipients to provide their response. The responses will then be verified and analyzed to complete the findings of the research.

Gantt chart:  

            The Woolworths conduct a feasibility report before implementing its corporate social responsibility. The budget and the Gantt chart showing the implementation of CSR are attached. The budget clearly shows that at CSR project may suffer losses but gradually start earning profits in second and third years onwards.

Task Mode	Task Name	Duration	Start	Finish	Predecessors
Auto Scheduled	Establishment of CSR in Woolworths	15.05 mons	Mon 9/3/18	Mon 10/28/19
Auto Scheduled	Conducting market resesrach of Australia	3 mons	Mon 9/3/18	Fri 11/23/18
Auto Scheduled	Making strategies	1 mon	Mon 11/26/18	Fri 12/21/18	2
Auto Scheduled	Obtaining approval form government	1 mon	Mon 12/24/18	Fri 1/18/19	3
Auto Scheduled	Preliminary Investigation	1 mon	Mon 1/21/19	Fri 2/15/19	4
Auto Scheduled	Assembling all the Preliminary Data	1 mon	Mon 2/18/19	Fri 3/15/19	5
Auto Scheduled	Researching the Data	2 mons	Mon 3/18/19	Fri 5/10/19	6
Auto Scheduled	Compiling the Data	2 mons	Mon 5/13/19	Fri 7/5/19	7
Auto Scheduled	Submission of the Draft	0.05 mons	Mon 7/8/19	Mon 7/8/19	8
Auto Scheduled	Continuation of the Research	2 mons	Tue 7/9/19	Mon 9/2/19	9
Auto Scheduled	Assembling New Informations	2 mons	Tue 7/9/19	Mon 9/2/19	9
Auto Scheduled	Identification of the Sample	2 mons	Tue 7/9/19	Mon 9/2/19	9
Auto Scheduled	Selecting The Number of Sample Size	2 mons	Tue 7/9/19	Mon 9/2/19	9
Auto Scheduled	Interviewing The Sample Population	2 mons	Tue 7/9/19	Mon 9/2/19	8
Auto Scheduled	Researching on the Avialable Data	2 mons	Tue 9/3/19	Mon 10/28/19	10
Auto Scheduled	Compiling the Total Data	2 mons	Tue 9/3/19	Mon 10/28/19	2
Auto Scheduled	Assembling and Preparing the final Report	1 mon	Tue 9/3/19	Mon 9/30/19	3
Auto Scheduled	Final Submission to apex management of Woolworths	1 mon	Tue 9/3/19	Mon 9/30/19	4

	Year 1	Year 2	Year 3
	Amount($)	Amount($)	Amount($)
Sources for income
Sales	1000000	1100000	1210000
Loan from bank	200000	250000	300000
Total	1200000	1350000	1510000
Expenditure
Premises	1000000	0	0
Human resource expenditure	100000	100000	200000
Resources from other countries	500000	600000	400000
Resources from Australia	20000	40000	30000
Marketing	100000	150000	165000
Risk management expenses	2000	5000	6000
Total expenses	1722000	895000	801000
Budget surplus	-522000	455000	709000

References

Ding, Z., Au, K., & Chiang, F. (2015). Social trust and angel investors’ decisions: A multilevel analysis across nations. Journal of Business Venturing, 30(2), 307-321.

Epstein, M. J. (2018). Making sustainability work: Best practices in managing and measuring corporate social, environmental and economic impacts. Routledge.

Fairlie, P., &Svergun, O. (2015). The interrelated roles of CSR and stress in predicting employee outcomes. In International Conference on Occupational Stress and Health, Atlanta, USA.

Flannery, M. J. (2016). Stabilizing large financial institutions with contingent capital certificates. Quarterly Journal of Finance, 6(02), 1650006.

Grayson, D., & Hodges, A. (2017). Corporate social opportunity!: Seven steps to make corporate social responsibility work for your business. Routledge.

Hossain, M. S., & Al-Amin, M. (2016). Best model of CSR: An analysis of the impact of corporate social responsibility for improving the social development of the stakeholders-A study on four private commercial banks. International Journal of Information, Business and Management, 8(2), 74.

Jamali, D. R., El Dirani, A. M., & Harwood, I. A. (2015). Exploring human resource management roles in corporate social responsibility: the CSR?HRM co?creation model. Business Ethics: A European Review, 24(2), 125-143.

Jiang, F., Zalan, T., Herman, H. M., &Shen, J. (2018). Mapping the relationship among political ideology, CSR mindset, and CSR strategy: A contingency perspective applied to Chinese managers. Journal of Business Ethics, 147(2), 419-444.

Kolk, A. (2016). The social responsibility of international business: From ethics and the environment to CSR and sustainable development. Journal of World Business, 51(1), 23-34.

Malmendier, U., & Tate, G. (2015). Behavioral CEOs: The role of managerial overconfidence. Journal of Economic Perspectives, 29(4), 37-60.

Ni, A., & Van Wart, M. (2015). Corporate Social Responsibility: Doing Well and Doing Good. In Building Business-Government Relations (pp. 175-196). Routledge.

Rangan, K., Chase, L., & Karim, S. (2015). The truth about CSR. Harvard Business Review, 93(1/2), 40-49.

Rebai, S., Azaiez, M. N., &Saidane, D. (2016). A multi-attribute utility model for generating a sustainability index in the banking sector. Journal of Cleaner Production, 113, 835-849.

Schwartz, M. S. (2017). Corporate social responsibility. Routledge.

Seabrooke, L., &Wigan, D. (2017). The governance of global wealth chains. Review of International Political Economy, 24(1), 1-29.

Wellhausen, R. L. (2015). Investor–state disputes: when can governments break contracts?. Journal of Conflict Resolution, 59(2), 239-261.

Wong, J. Y., &Dhanesh, G. S. (2017). Communicating corporate social responsibility (CSR) in the luxury industry: managing CSR–luxury paradox online through acceptance strategies of coexistence and convergence. Management Communication Quarterly, 31(1), 88-112.