Analyzing Corporate Social Responsibility (CSR) Activities Of Tesco – Report

Literature Review

CSR (Corporate Social Responsibility) has always been regarded as one of the important societal issues which has also gained momentum in the retail industry. This paper is going to deal with the CSR concepts in context to the current business environment. It would elaborate on analysing the CSR activities of a chosen supermarket- TESCO. It would analyse both the market and the non-market environment for the company also the different activities it undergoes in terms of CSR practices. It would also be presenting a brief literature review discussing the different theories and frameworks of CSR would provide a detailed analysis of the CSR practices of the company with reference to the frameworks and theories that are discussed in the literature review. Furthermore, the paper has also provided some recommendations for the future conduct of the company

The term Corporate Social Responsibility can be explained as the commitment of a particular business towards contributing to the sustainable economic development while working with workers of the company, their families, the society and the local community for improving the quality of their life. As per Van Marrewijk (2013), CSR is a concept whereby the firms integrate environmental and social concerns in their respective business operations as well as their interaction with their stakeholders. However, CSR is one the responses of the companies to balance the imbalances caused due to the acceleration of international contributions to the environment or societies where they operate their businesses. It is the practice of managing the economic, the environmental and the social impacts of the organisations that are being responsive to the stakeholders as well as behaving as per the set of values that are not chartered in the law. Moreover, according to Strand, Freeman and Hockerts (2015), Corporate Social Responsibility describes the principles that- The firms must make positive and productive contribution to the society and the environment and it may differ from a wide range of social practices like donating to charity, taking actions to reducing carbon footprint, sponsoring awards, employment diversity business ethics or increasing environmental awareness.

It is also to note that CSR involves the maintenance of the stakeholders and employees of the company. Proving them with some minimum facilities, even on a contractual basis would fulfil a part of organisation’s social responsibility. However, it is to note that there are a total of two theories that are generally taken into consideration for explaining CSR and they are Social Contract Theory and Stakeholder Theory. As per Agudo-Valiente, Graces-Ayerbe and Salvador-Figueras (2015), “A stakeholder theory of the firm is used as a basis to analyse those groups to whom the firm should be responsible”. In this context Ait Sidhoum and Serra (2018) have suggested that an organisation could be defined as a wide range of networks of different stakeholders, whom the manager of the very organisation seek to satisfy. Bryson (2018) have defined stakeholders as “any group or individual who can affect or is affected by the achievement of the organization’s objectives”. However, stakeholders of a firm could be divided into two groups- Primary stakeholders and Secondary stakeholders. Primary stakeholders are the ones without whose continuous participation the firm could not survive in the business environment and failure to retention of these groups lead to failure of entire corporate system. For example- the shareholders, customers, suppliers and employees. On the other hand, the Secondary stakeholder groups are defined as the ones whose “influence or affect, or are influenced/affected by the corporation, but they are not engaged in transactions with the corporation and are not essential for its survival”. Media is one of the examples of such secondary stakeholders.

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Furthermore, the social contract theory is dependent on the social contracts of the traditional concepts. As per Dunfee and Donaldson (2017) this theory is of higher level than that of the Stakeholder theory because it portrays the complexity specific to the context of the business situations. With the same, they have also proposed that social contract enables the empirical and the normative factors to harmonise, which is a problem that the stakeholder theory has failed to address. The social contract theory for the business ethics would be based on the context that is deriving the responsibilities of the business. The obligations of the business on ethical issues towards the individual members of the community are obtained from the agreements. Hence, this theory theorizes the implicit contract among the business and its members where the specified benefits prevails. Furthermore, ethics and culture of a company is regarded to be the most important aspects of the financial performance. This is due to the fact that the financial performance of an organisation tend to increase with the increase in the cultural values because the employees the get the necessary motivation in order to enhance their productivity.

TESCO supports fair trade and taking staffs, customers, suppliers and customers into consideration along with the environment and local community. It has made significant contribution in the field of education, environment and social work.

Education	Environment	Social Work
1. Partnership with “I CAN”. 2. Gives support to the children through educational programmes 3. Provides computers in different schools through “Computers for Schools” programme.	1. Integrated its CSR in its environmental management comprising of resources, emissions, and wastes and recycling 2. “Wildlife choice” initiative 3. Collects fees and encourages reuse of plastic bags.	1. It has established a charity trust named “TESCO Charity Trust” 2. Each year it chooses a community charity 3. It supports charities and staff fundraising

1. Education-It creates special support for the children on the basis of educational programmes and projects for creating peaceful environment for its business operation. It has undergone partnership with a charity that assists children community with language difficulties named “I CAN” (Rogala et al., 2015). It offers them scholarships and has established several cultural community centres. One of the educational programs include the “Computers for Schools” programme that is aimed at school. Through this it provides computers to the schools in different countries and also supports them with new technologies.
2. Environment-The organisation has integrated its corporate responsibility in its environmental management comprising of the topics like resources, emissions, and wastes and recycling. With the same, there are also other issues that are covered like animal welfare, vehicle efficiency, organic food and green transport. It promotes environmental issues by means of training package (Cheg et al., 2015). It is also to note that “Wildlife choice” is one of the example of the initiatives taken by TESCO towards environment related issues. This initiative requires farmers to take wildlife into consideration on their firms. It works very closely with its product suppliers as well as the farmers in order to keep an eye and protect wildlife. Also, it helps in collecting fees and in encouraging the reuse of plastic bags.
3. Social Work- It has established a charity trust named “TESCO Charity Trust” in the year 1987 for supporting the local as well as the national communities in making grants to the charities within the UK region (Caraher & Furey, 2018). Furthermore, it contributes 1% of its profits gained by pre-tax for good causes and also, it supports charities and staff fundraising. Moreover, each year it chooses a community charity that is close to the hearts of its customers and staffs and this becomes the focal point for its staff fundraising.

CSR has been regarded as one of the new exhortation but it is not a concept which is completely new to TESCO. It is to note that the term “Corporate Social Responsibility” has been recognised in the middle of 1920s and since then, it has taken an identifiable shape within these years. Therefore, to act and build trust among the shareholders, the business representatives and the executives have searched for corporate directors in the company. It could be applied for both the stockholders and the social claimants as well. There are several objectives for the strained demands of the framework of CSR. Below mentioned are the five key drivers of the TESCO’s CSR framework.

• Establishment of the knowledge economy.
• Globalisation of the markets of TESCO.
• Employment of the communications technology world-wide.
• Federate the power for achieving corporate responsibility during comparing it to the less number of international and global companies.

It is to note that although Tesco enforces its stakeholders to follow international standards in the supply of the goods and services to the firm that portrays a significant influence on them for concentrating on the supply and the production quality, it has failed to follow some CSR policies. It does not provide its stakeholders and employees with some significant ethical features. Tesco does not maintain its business performance. Instead, it focused on its financial aspect (Khan & Korac Kakabadse, 2014). With the same, Tesco does not give priority to the stake holders and it focuses only on the financial aspects of the business. If Tesco could have considered all the stakeholders as well as its stock holders then it would have increased its performance. As per the stakeholder theory the management of this firm must take into account the interests of the stakeholders and if these interests collide with one another, the business would have managed for attaining the minimum balance within the stakeholders. Hence, in context to the stakeholder theory, Tesco do not have any sort of social responsibilities which imply its business performance. It basically depends on the decisions of the individuals instead of the group decisions. With the same, as per the normative theory decisions that are taken from individual is time taking when comparing with the group decisions. As per this theory, the employees or the subordinates of the firm are committed to the decisions which are made by the group participation. It is also to note that Tesco not only works on the basis of the decisions made by the management but it also not allow its employees to provide their suggestions. It is only the managers in the Tesco who take every responsibilities in decision making. 

The Corporate strategy of Tesco concentrates on generating value for its customers for producing brand loyalty for lifetime (Casteran, Meyer-Waarden & Reinartz, 2017). It is committed towards carrying business in socially responsible manner and is also at the same is trying to ethically handle it. It is maintain a code of conduct for its employees and suppliers for protecting its environment by making use of commercial strengths for applying its principles in the practise. However, most of the researchers have suggested that Tesco is putting the burden of the costs and risks of its new business process on its key stakeholders- the farmers. In order to carry out their new business process, they have imposed some policies in the company and among them, the ethical trading is portraying its influence on the employee standards and the organisations. It is to note that the business ethics of Tesco comprise of- maintenance of the international labours standards, ethical trading by decreasing the production cost and maximising the products prices, employing the labour on the basis of contracts for decreasing the labour cost. These have become some of the major issues in the point of stakeholders. It has been identified that the suppliers were complaining on the issue that they were paid less than they should be for their supplies. Where else, the company is earning a good amount on those products.

Ethical Trading	Environment	Social Work
1. It gives fair working hours to its workers and also pays for overtime 2. It supports fair-trade since the year 1992 (Jones, Hillier & Comfort, 2014) 3. It has been applying “sound sourcing code of conduct” in the supply chain source from the different developing nations	1. Participate in the Carbon Disclosure Project (CDP) 2. Many of their stores make use of lower fossil fuel energy and they use wind turbines, Combined Heat, solar panels and Power 3. They Support the farmers to convert to organic milk production (Jones & Comfort, 2018)	1. It donates about 52 million pounds worth of equipment to children in UK 2. It sponsors “Youth Sport Trust” 3. Provides active kid campaigns with an aim to inspire children to be more active and health conscious for preventing the rise in the level of lifestyle disease.

Prices	People	Planet
1. It is helping its growers and producers in developing a wide variety of naturally healthy products. 2. It is giving healthier options which also cares for the surroundings.	1. It is listening to its employees and customers to make it easy for them to serve the products that they matter by decreasing down the packaging and promoting Fairtrade (Misani, 2017).	1. It is developing energy efficiency to its CSR (Jones & Comfort, 2018). 2. It is sending zero waste to landfill and is cutting road miles.

Conclusion:

TESCO has been considered as a corporately responsible firm world-wide. Its CSR policies of  delivering some unbeatable values is playing a significant role in the society and the local communities and is working with its customers for helping the environment and for supporting good causes. This has also backed up by its policies and activities. However, it has been analysed that it has seen its ethical stances being questioned since last few years. They have resulted in some major public criticism towards the ability of the company to act responsibly in their practices and actions.

1. The company should actively and effectively communicate its CSR policies by means of different commercial and public channels. Only limiting the marketing channels of CSR to the company websites is not sufficient in this contemporary business environment. It is very important that such issues are effectively communicated by means of high exposure channels. If it successfully communicates to its consumers that it is concerned with customer satisfaction, providing honest and complete information and charging fair prices for their products then it is possible to see a significant improvement in the brand loyalty.
2. It should conduct its business in ethical manner so as to meet the demands and basic needs of the stakeholders and that too without influencing its own production and profits. It should be ethical in every aspects in which it deals with to benefit its communities.
3. It should be socially responsible with the society and the local communities, its suppliers, customers and its business partners along with its employees and shareholders. It is to note that the CSR with the local communities and society should be expressed through contribution to the development of the community in terms of generating employment opportunities and integrating companies in the local environment. It should also establish training commitments and must take initiative towards environmental conservation. It should also take the responsibility for promoting entrepreneurship in its location by means of tutoring or assisting small businesses for making contribution in social responsibility.

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