Corporate Social Responsibilities Of Leading Supermarkets In Australia: Literature Review

Literature Review Scope

Discuss about the Corporate Social Responsibilities of leading supermarkets in Australia.

Literature review is concerned with the collection of information regarding a particular topic from different types of scholarly papers. This literature review will explore of the corporate social responsibilities (CSR) of leading Australian Supermarkets. Corporate social responsibilities are the ranges of corporate initiatives towards the social wellbeing within which the organizations operate their businesses (Singhapakdi et al. 2015). The literature review will demonstrate the concepts of CSR in organizational context. Various theories and model of CSR will also be highlighted in this literature review. The literature review will gather huge information regarding the CSR activities performed by the leading Australian supermarkets. On the other hand, the benefits of CSR activities on those supermarkets will also be the concern of this literature review.

The scope of the literature review lies on the exploring the corporate social responsibilities of leading Australian Supermarkets. The literature review can provide huge authentic secondary information to the subsequent researcher for conducting research on same types of research topic. The literature review has also the scope of assessing the impact of CSR activities on the leading Australian supermarkets.

• To demonstrate the corporate social responsibilities of the leading Australian supermarkets
• To recognize the issues of corporate social responsibilities associated with the leading Australian supermarkets
• To highlight the impact of corporate social responsibilities on the leading Australian supermarkets

Corporate social responsibility is the management concept, where the organizations integrate environmental and social concern in their business operation for the wellbeing of the stakeholders as well as society. According to Boulouta and Pitelis (2014), corporate social responsibility is the corporate initiatives through which the organizations attempt to achieve the balance of economic, social and environmental imperatives and at the same time meet the expectations and shareholders and stakeholders. The organizations can express their CSR initiatives through various forms like reducing wastes and pollution, contributing in social and educational programs and earning adequate return for the employees and shareholders. On the other hand, Lee, Kim and Kim (2018) opined that the organizations must need the approaches, which fit the capacities and needs of the business for promoting effecting CSR activities. Effective and well managed CSR activities have direct influence on enhancing the corporate reputation and brand value of the business organizations. 

Carroll’s CSR Pyramid

Carroll’s CSR model demonstrates a simple pyramid, which helps the business organization to perform CSR activities effective by demonstrating right ways of CSR responsibilities. This model is consisted of four types of responsibilities namely economic responsibility, social responsibility, legal responsibility and philanthropic responsibility. According to Saleh, Ebeid and Abdelhameed (2015), economic responsibility is associated with the corporate responsibility, where the organizations must have to be profitable enough to for providing adequate return on investment to the key shareholders. It can help the business organizations to gain the trust of the shareholders and they can gain adequate investment for operating the business for longer period. Moreover, economic responsibility is the only way of long term survival of businesses and providing benefits to the society. On the other hand, Wu and Wang (2014) opined that Legal responsibility is associated with the corporate responsibility, where the organizations must have to obey the laws and regulations for avoiding legal risks. Moreover, the organizations must have to obey all the employment laws, health and safety laws and competition laws for long term business sustainability.

Literature Review Objectives

Ethical responsibility is concerned with responsibility of the business organizations to act ethically and morally. According to Park and Ghauri (2015), in ethical responsibility, the business organizations should go beyond the narrow requirements of laws and legislations. Such responsibility is actually associated with fair treatment of employees and suppliers from the organizations. Furthermore, Plewa et al. (2015) stated that philanthropic responsibility is associated with the corporate responsibility, where the organizations give back to the society within which they operate. Such responsibility is associated with the charitable donations, educational development of society and staff time on project.

Figure 1: Carroll’s CSR Pyramid

(Source: Costa, Lages and Hortinha 2015)

Ackerman’s Model of CSR

As per the liabilities, priorities or even responsibilities, Ackerman proposed the model of CSR to be intuited by the organizations. The model has laid down three phased to be performed by the organizations for performing CSR activities in an effective manner. Hence, this model is more than just CSR model and provides the strategies for effectively implementing the CSR initiatives.  According to Story and Neves (2015), the first phase of CSR activities is concerned about the top managers in organization recognizing the social problems. The model is highly focused on developing internal management process, which affects the social responsiveness through making the organizations more flexible to respond to the organizational changes. On the other hand, Garcia-Sanchez, Cuadrado-Ballesteros and Frias-Aceituno (2016) opined that the second phase of Ackerman’s Model is associated with intensive study of the social problem and hiring experts for finding solutions to the social problem. In the third phase, the organizations actually implement the proposed solution of CSR activities to mitigate the social problem.

While considering the viewpoint of Costa, Lages and Hortinha (2015), it has been identified that the Australian supermarket is extremely focused in providing fresh and quality products to the consumers. This indicates that the sector not only serves to be ethical but also fulfilling the philanthropic concerns. For example, the retail giant Coles Supermarket has taken the initiative ‘Australian First Sourcing Policy’ through which it is sourcing the locally grown food. This helps in uplifting the local farmers and eventually deals with strengthening the national economy. The local farmers act as the supplier for fresh vegetables, which count for 96% of total grocery and vegetable items available in Coles. On the other hand, the consumers are able to get fresh products directly from the retail chain. Moreover, since the number of intermediators is quite less, the products are sold at very low price, which ensures affordability. 

Concept of Corporate Social Responsibility

On the other hand, Grimmer (2018) argued that the Australian supermarkets are more inclined in earning profitsthan establishing a reputable image through CSR. For example, retail chains such as 7- Eleven has been found to create wage-theft by not paying the employees for multiple months. This had created a huge negative image and the negative publicity resulted in resigning the Chief Executive Officer and the then Chairman in the year 2015. Such incident indicates that the ethical pillar of Carroll model has never been fulfilled. Moreover, Rowe et al. (2014) pointed out that in the year 2011, Coles and Woolworths has been found to impose harsh conditions on the local growers by announcing that their products won’t be purchased if they do not meet the environmental standards. The local farmers being quite poor who failed to meet the standards were never able to flourish themselves. Therefore, it can be said that in order to create strong corporate image, the retail giants are exploiting the suppliers rather than supporting them.

Türkel et al. (2016) pointed out that top retail supermarkets in Australia are ensuring safe workplaces for their employees along with diversity programs. This helps in building healthy employment status along with competitive talent within the industry. Moreover, such initiative helps in restoring the balance between gender diversity through inclusive programs. On the other hand, Pérez (2015) extended the viewpoint by pointing out the example of Wesfarmers, which has shown $68.4 billion wealth creation and $15.2 billion value creation through community wealth creation activities. Moreover, it can also be said that through such value creation activities, Wesfarmers is able to create a strong bod with employees, government, lenders and shareholders. In this way, the organization has able to strengthen its sustainability, which has resulted in accompanying more than 18,000 suppliers wityh more than 5,000 supplier and factory sites (Siddiq and Javed 2014). Such great operation and network has resulted in higher return on investment, which resulted in attracting more investors and shareholders’ wealth maximization.

On the other hand, while considering the viewpoint of Das and Bhunia (2016), it can be said that Australian supermarkets have been facing issues related to labor sourcing, international sourcing andenvironmental sustainability. It has been found that most of the retail chains in Australia do not disclose their CSR reports in official website and therefore it becomes questionable whether each of the four activities (supply chain, employees, environment and community) are addressed. Even though Woolworths has been found to disclose CSR report however retailers such as Aldi, JB HI-FI, Dick Smith, 7-Eleven has not been found to significantly comply with community, employee and supply chain activities. While considering the viewpoint of Costa, Lages and Hortinha (2015), it can be found that Myer and David Jones contribute in environmental sustainability issues such as waste management and water use, which are mostly considered as immaterial. Therefore, it can be said that the organizations which are the largest supermarket retail chains in Australia are the most likely to fulfill all the CSR activities and their reports are transparent enough when audited.

Theories and Models of Corporate Social Responsibility

According to Lee, Kim and Kim (2018), it has been found that Woolworths Limited and Wesfarmers group focus on welcoming Indigenous Employment Policies and Employee Disability Program respectively. This indicates the ethical treatment of communities and sustainability approach for future. However, Aldi Australia has been found to face supplier sourcing issues. Moreover, Singhapakdi et al. (2015) pointed out that Myer and David Jones do not ensure local sourcing and therefore quality of products are not fresh and likable as compared to Coles or Wesfarmers. Therefore, it can be said that at present the organizations are not able justify the communities, especially the customers who want fresh products. There might be ethical dilemma with respect to organizational stakeholders’ expectation, which needs to be further evaluated. 

Saleh, Ebeid and Abdelhameed (2015) pointed out that Woolworths has created the safe place to work, inclusive and diversity programs, indigenous representation and gender equality. Similarly, Coles has started following the same employment opportunities for indigenous people so that community can be uplifted. Moreover, the top retailer supermarkets in Australia such as Woolworths ensures animal welfare, sustainable fish and seafood, genetically modified foods and sustainable forestry products.Wesfarmers on the other hand, has been found to focus on circular economy by reducing the waste through landfills. In this way, the organization is trying to respond climatic change by reducing the carbon emission.

The argumentative views from Wu and Wang (2014) highlight that the entire Australian retail supermarket cannot be considered to be focusing on environmental sustainability. This is because the CSR activities cannot be measured at all of the instances such as while soft-selling-advertising, collateral damage and sustainable supply. The retail supermarkets are trying to sell their products through creating a choice among the consumers through advertisements due to which the target market ends by buying products beyond their requirement. For example, Coles’ “Baked Today” has been already prepared and packed quite before a couple of months (Saleh, Ebeid and Abdelhameed 2015). On the other hand, Plewa et al. (2015) pointed out that the supermarkets are trying to animal through intensive and factory farming practices. These activities cause animal suffering and environmentally unsustainable practices. It has been found that due to the compliance of RSPCA standards for chicken meat and home-brand eggs less attention is being paid to animal welfare.

Corporate social responsibility helps the business organizations towards enhancing the corporate image in the society through supporting the non-profits by monetary donations, kind donations, strong partnership and volunteerism. According to Rowe et al. (2014), effectively managed CSR activities facilitate the leading supermarkets of Australia to differentiate their brands over other competitors in the market. While considering the benefits of CSR on Woolworths, the environmental sustainable initiatives and social development programs have facilitated it to get unique position in the market. However, Türkel et al. (2016) opined that CSR activities more often shift the organizational focus from profit making objectives. Hence, such activities can often reduce the overall profit volume of the organizations. The economic profitability demonstrated by the business organizations attracts and retain the key investors. Hence, such positive impression attracts the investors to invest in the organizations repeatedly, which enhances the long term financial sustainability of the organizations. 

Critical Analysis of Corporate Social Responsibilities of leading supermarkets in Australia

According to Das and Bhunia (2016), the organizations are more likely to attract and retain the talented, hardworking and engaged employees, while they are dedicated towards  improving the communities though various forms of corporate giving. While considering the benefits of CSR activities on Wesfarmers of Australia, it can be seen that the organization can become able to reduce the turnover rate of the employees 25% through effectively implementing employee volunteering programs. However, Pérez (2015) opined that CSR programs can actually increase the business expenditure of the organization. Such increased business expenditure is actually reflected on the overall business expenses of the organizations. Effective social benefit and fair business programs can also create a positive impact on the minds of the customers. Hence, such customers become extremely loyal to the business organizations. While considering the evidence of Aldi, it can be found that there was 30% customer repetition in the last year with the increased positive image through CSR activities.  

While considering the viewpoints of the authors, it can be said that a question is raised, which is whether CSR activities actually help in community and environment engagement or it is a complete profit-oriented notion for retail organizations in Australia. It has been observed that only the greatest retail supermarket giants such as Woolworths and Coles are well practicing CSR activities with enough transparency in their annual reports as highlighted by the authors in the earlier critical analysis. However, it becomes questionable when it comes to compare with Aldi, 7 Eleven, Myer or David Jones. There have been several issues with respect to ethics or community development. It has been clear that in order to achieve economic pillar of the Carroll’s CSR pyramid, most of the well-known retail supermarkets in Australia are exploiting the other three pillars. Therefore, it can be said that there lies a gap in analyzing the actual quantifiable outcome whether the retail supermarkets are actually transparent enough in achieving their CSR activities. In order to address this gap deeper analysis has to be done considering all the CSR activities for such a retail organization that has been under question or under poor CSR activity issues in the past.

Conclusion

While concluding the study, it can be said that corporate social responsibility is concerned with the social, environmental and economic benefits of an organization. Australian supermarkets are high highly responsible and associated with the CSR activities for the social wellbeing of their surrounding society. The most reputed Australian supermarkets like Woolworths, Aldi, Wesfarmers and others has gained high level of corporate image in the society through performing effective CSR programs. 

Reference List 

Boulouta, I. and Pitelis, C.N., 2014. Who needs CSR? The impact of corporate social responsibility on national competitiveness. Journal of business ethics, 119(3), pp.349-364.

Costa, C., Lages, L.F. and Hortinha, P., 2015. The bright and dark side of CSR in export markets: Its impact on innovation and performance. International Business Review, 24(5), pp.749-757.

Das, L. and Bhunia, A., 2016. The Impact of CSR on Firms’ Financial Performance–A Literature Review. American Journal of Business, Economics and Management, 4(4), p.66.

Garcia-Sanchez, I.M., Cuadrado-Ballesteros, B. and Frias-Aceituno, J.V., 2016. Impact of the institutional macro context on the voluntary disclosure of CSR information. Long Range Planning, 49(1), pp.15-35.

Grimmer, L., 2018. The diminished stakeholder: Examining the relationship between suppliers and supermarkets in the Australian grocery industry. Journal of Consumer Behaviour, 17(1), pp.e13-e20.

Lee, C.K., Kim, J.S. and Kim, J.S., 2018. Impact of a gaming company’s CSR on residents’ perceived benefits, quality of life, and support. Tourism Management, 64, pp.281-290.

Park, B.I. and Ghauri, P.N., 2015. Determinants influencing CSR practices in small and medium sized MNE subsidiaries: A stakeholder perspective. Journal of World Business, 50(1), pp.192-204.

Pérez, A., 2015. Corporate reputation and CSR reporting to stakeholders: Gaps in the literature and future lines of research. Corporate Communications: An International Journal, 20(1), pp.11-29.

Plewa, C., Conduit, J., Quester, P.G. and Johnson, C., 2015. The impact of corporate volunteering on CSR image: A consumer perspective. Journal of Business Ethics, 127(3), pp.643-659.

Rowe, A.L., Nowak, M., Quaddus, M. and Naude, M., 2014. Stakeholder engagement and sustainable corporate community investment. Business Strategy and the Environment, 23(7), pp.461-474.

Saleh, M.H., Ebeid, A.Y. and Abdelhameed, T.A., 2015. Customers’ perception of corporate social responsibility (CSR): its impact on word-of-mouth and retention’. Innovative Marketing, 11(2), pp.49-55.

Siddiq, S. and Javed, S., 2014. Impact of CSR on organizational performance. European Journal of Business and Management, 6(27), pp.40-45.

Singhapakdi, A., Lee, D.J., Sirgy, M.J. and Senasu, K., 2015. The impact of incongruity between an organization’s CSR orientation and its employees’ CSR orientation on employees’ quality of work life. Journal of Business Research, 68(1), pp.60-66.

Story, J. and Neves, P., 2015. When corporate social responsibility (CSR) increases performance: exploring the role of intrinsic and extrinsic CSR attribution. Business Ethics: A European Review, 24(2), pp.111-124.

Türkel, S., Uzuno?lu, E., Kaplan, M.D. and Vural, B.A., 2016. A strategic approach to CSR communication: Examining the impact of brand familiarity on consumer responses. Corporate Social Responsibility and Environmental Management, 23(4), pp.228-242.

Wu, S.I. and Wang, W.H., 2014. Impact of CSR perception on brand image, brand attitude and buying willingness: a study of a global café. International Journal of Marketing Studies, 6(6), p.43