The primary objective of the report is to outline the activities of the Wesfarmers. The CSR activities, corporate governance, and the stakeholder’s expectations are taken into consideration by the report. Wesfarmers is famous for dealing in trade, fertilizers, coal mining, chemicals, safety and industrialized products. Wesfarmers is considered to be the highest earning revenue company in Australia due to performance and improvement done by them in the products and services offered. The company has issued the concern related to the product safety which includes the Coles and Kmart. These concepts are introduced by the company in 2017 with the aim to provide the safety in the products and services offered by the Wesfarmers (Wesfarmers, 2018a). The company is increasing the supply chain transparency in the business so that each and every stakeholder will be informed about the company performance. Wesfarmers is committed to minimizing their own footprints and delivering the solution which will help the customer and the community to do the same. The company always tries to improve the performance and progress of the company. All these activities performed by the company show the CSR activities and governance is followed in the organization (Wesfarmers, 2015).
In Wesfarmers, the top level management of the company is aiming to protect the interest of shareholders and other members by protecting the environment. The company is continuously working towards achieving the sustainability in the industry. The main purpose of the industry is to carry the business with effectiveness in the long run. Corporate Social Responsibility is the responsibility which has to be performed by each and every organization irrespective of its size and nature of the business (Jones, Comfort and Hillier, 2014).
CSR activities are done by the organization to have the good company image in the mind of people which are affected by the decision taken by the company.
Wesfarmers is focusing on providing the safe work environment to its employees, customers, suppliers and visitors on the highest priority.
Providing and improving the protection to all the core actions whether it is for retail store or for a built-up site. Wesfarmers is focusing for improvement in the leadership welfare, to target strategy for the reduction in the risk faced by the company and improving the physical and mental health (Wesfarmers, 2018a).
The contribution towards the society by the Wesfarmers is to decrease the emission intensity of our productions and to improve the elasticity to the climatic transformation. Company is providing the way to reduce the waste which is produced during the time of production of goods. It will help in filling the land and water where possible.
Company is focusing on enhancing the individual career and performance. Wesfarmers is striving to make a comprehensive work environment with specific attention to the gender diversity so that equality will be there in the organization (Wesfarmers, 2018b).
Wesfarmers is sourcing to commit a strong and respectful relationship with the suppliers of the company and try to delivers the best products in the responsible manner.
The development of the community is also done by Wesfarmers by giving the positive contribution and committed to provide the safety of products. For this company has used the two concepts which are Cole and Kmart which are developed to ensure the safety in the products (Hur, Kim and Woo, 2014).
The company is maintaining the robust corporate governance policies in the business. In this each business is able to identifies the key issues relevant to the operations (Wesfarmers, 2015)
The corporate governance can be defined as the mechanisms, processes and relation by which the corporations are controlled and directed effectively. The governance structure of the company depicts the principles followed in the organisation, the responsibilities given to the different members in the participants. These different members include the board of directors, employees, shareholders, managers, creditors, auditors and other stakeholders. The corporate governance also tells about the Wesfarmers policies and procedures followed in the company (Baur and Miyakawa, 2014).
Wesfarmers are using the robust governance policies in the business. Robust governance is nothing but giving the importance and views of all the operations done in the business. Wesfarmers makes the rules, processes and policies which are showing the governance used in the business activities. The framework of corporate governance has been established in the year 2016 by the Wesfarmers board using the corporate Governance statement (Wesfarmers, 2017).
Wesfarmers governance structure is focusing on defining the roles and responsibilities for the board and management. The role of the board is to support the strategic course of the group, control them and monitor the management of the company. It also helps in attaining the strategic plans and oversees decent governance practice in the business. The Board purpose is to protect and improve the interest of the people who are affected by the decision taken by the company these people include the stakeholders of the company. Wesfarmers governance is focussing on improving the culture of compliance that values the moral behaviour, individual and company integrity, responsibility and respect for other (Wesfarmers, 2018b).
In corporate governance structure of Wesfarmers the following issues are also into the consideration:
There should be followed of conflict of interest policy in the business
A proper code of conduct should be followed in the business in which all the rules, policies and procedures are operated.
Promoting the whistle-blower that means to support a culture of honesty, integrity and moral behaviour of the business.
Use of securities trading policy. It includes setting out the rules designed to ensure compliance with insider trading laws and helps in protecting the reputation in relation to trading securities by its directors and employees for Wes farmers (Wesfarmers, 2018c).
Developing the investor policy in which proper meeting and communication with Wesfarmers shareholder are there through the conduct of Annual General Meeting.
Set out the minimum level of control and standards required across the group to ensure the compliance with environmental law, environmental license conditions and regulatory framework.
The concept of corporate social responsibility performed by the company can also be understood using the models. To study in detail the ethical practices and model adopted by the company, there are models named Carroll Pyramid model and Wartick and Cochrane’s model are discussed:
Carroll has introduced this theory in the year 1991 to organized different corporate responsibility. In this diagram, a company has four types of errands which have to be accomplished. The four different responsibilities include:
(Source: Linked In, 2018)
The first and most obvious is the economic responsibility. In this responsibility, Wesfarmers is trying to achieve the maximum profits from the business done by them. To enable the profitability in the business, minimization of cost and maximizing the sales should be achieved by the company (Wesfarmers, 2018d).
The legal responsibilities include all the responsibility which are related to the obeying the law to operate the business successfully in the market. Obeying the law is the need of the society as it works as a mirror to the society (Linnenluecke, 2015).
This responsibility in the business is expected by the society and company do this responsibility with due care to have the good image in the minds of the consumer. Wesfarmers is doing this responsibility to assert the ethical leadership to operate above the minimum standard of the law (Wesfarmers, 2018).
This responsibility is staying at the top of the pyramid as it considered being a good company resident and tries to improve the lives of an individual and improve the quality of life for the society. Wesfarmers is doing so by giving the good quality of products and services to the society (Sullivan and Gouldson, 2017).
As per the Wartick and Cochran’s, the CSR responsibilities are divided into the three segments that are principles, process, policies and these sectors are stated below:
Principles can be defined as the fundamental truth or proposition. The Corporate Social Responsibility can be divided into the four parts which include the legal, ethical, and economical and philanthropists. All these sectors depict that the business is a moral and economic agent. In this context, Wesfarmers is fulfilling all the responsibilities and details of this responsibility with the due care as these responsibilities are already explained in the Carroll’s Pyramid Model (Shengtian, Weihui and Xiaosong, 2010).
A process can be defined as the way of doing the work in the organization. This can also be divided into the four parts which include defensive, reactive, proactive and accommodative. This sector or portion defines the capability of the business to react and respond in the environment according to the changes occurred. It also develops the feeling of managers to be responsible in nature as the changes affect the performance as well as the preference of society. In case of Wesfarmers, they are proactive in nature as this company scan the business environment time to time to have the changes regulated in the company strategies which are done in the environment (Wesfarmers, 2018e).
Policies can be defined as the basic rules and regulations which are followed in the organization. It can also be subdivided into three measures which include issues identification, response development and issues analysis. This area is made to reduce the shocks and surprises which are faced by the company at the time of operating the activity. Wesfarmers also determines their policies and strategies related to CSR in an effective manner. Wesfarmers are focusing on the identification of the issues using the policies and plans in developing the response (Shengtian, Weihui and Xiaosong, 2010).
While conducting the operations, the company wants to have the direct communication with the stakeholders. The views and expectation of the stakeholders are taken into consideration by the company as it is the aim of the company to satisfy its stakeholders at its best capacity and capability. The most important stakeholders include the shareholders, creditors, customer’s government etc. the aim of the company is to strengthen its stakeholders and company related people (Akbar and Ahsan, 2014).
Wesfarmers is trying to find out the difference between the actual and potential performance done by the company for the stakeholders. If there is any gap between these two then the following measures will be taken by the company to reduce it and will try to meet the expectation of the stakeholders. Wesfarmers tries to consider the interest of a wide cross-section of the stakeholders in a variety of ways. These ways include a stakeholder engagement survey by the company to have the communication on sustainability issues of the company (Byrne and Daymon, 2014).
Stakeholder’s also identified some issues which are related to the climate and environmental change, relationship with the suppliers, investment patterns followed by the company and many other factors (Wesfarmers, 2018). The company is earning huge profits, from the financial report of the year 2017. The company is giving the part of the profit to the shareholders also which satisfies the shareholders the most. From this fact, it can be said that the company is performing the CSR and stakeholders are satisfied with the performance and social responsibility performed by Wesfarmers (Wesfarmers, 2018e).
Conclusion
From the above discussion, it can be concluded that Corporate Social Responsibility is the most important aspect of the business and every business should have to perform this to remain competitive in the market. The company like Wesfarmers is also following the CSR and corporate governance activity in the organization. The company is introducing the Cole and Kmart for the safety in offering the industrial products and services, providing the safe environment for the stakeholders and other related people. The transparency in the accounts and supply chain is also maintained by the company. The CSR activities of the company are explained by using the two models also in which the stages are explained that which target to be achieved by the company on priority. For ensuring the long-term growth and profitability in the business, the company is giving back to the society through this framework.
References
Akbar, S. and Ahsan, K. (2014) Analysis of corporate social disclosure practices of Australian retail firms. International Journal of Managerial and Financial Accounting, 6(4), pp.375-396.
Baur, D.G. and Miyakawa, I. (2014) No puzzle: The foreign exchange exposure of Australian firms. International Review of Financial Analysis, 32, pp.13-22.
Hur, W.M., Kim, H. and Woo, J. (2014) How CSR leads to corporate brand equity: Mediating mechanisms of corporate brand credibility and reputation. Journal of Business Ethics, 125(1), pp.75-86.
Jones, P., Comfort, D. and Hillier, D. (2014) Environmental and Social Programmes and Rapidly Growing Retailers. Economia Seria Management, 17(1), pp.5-17.
Linked In. (2014) Carroll’s Pyramid of Corporate Social Responsibility [online] Available from: https://www.linkedin.com/pulse/20140905115337-70750023-carroll-s-pyramid-of-corporate-social-responsibility [Accessed on 13th June 2018]
Linnenluecke, M.K., Meath, C., Rekker, S., Sidhu, B.K. and Smith, T. (2015) Divestment from fossil fuel companies: Confluence between policy and strategic viewpoints. Australian Journal of Management, 40(3), pp.478-487.
O’Byrne, S. and Daymon, C. (2014) Irresponsible engagement and the citizen investor. Journal of Public Relations Research, 26(5), pp.455-473.
Shengtian, H., Weihui, F. and Xiaosong, L. (2010) Achieving sustainability with a stakeholder-based CSR assessment model for FIEs in China. Journal of International Business Ethics, 3(1), p.41.
Sullivan, R. and Gouldson, A. (2017) The governance of corporate responses to climate change: an international comparison. Business Strategy and the Environment, 26(4), pp.413-425.
Wesfarmers. (2015) Stakeholder Engagement [online] Available from: https://2015.sustainability.wesfarmers.com.au/our-approach/stakeholder-engagement/ [Accessed on 13th June 2018]
Wesfarmers. (2017) 2017 Sustainability report [online] Available from: https://sustainability.wesfarmers.com.au/media/1835/edited-extract-of-wesfarmers-2017-sustainability-report.pdf [Accessed on 13th June 2018]
Wesfarmers. (2018a) 2017 Corporate Governnace Statement [online] Available from https://www.wesfarmers.com.au/docs/default-source/corporate-governance/2017-corporate-governance-statement.pdf?sfvrsn=2 [Accessed on 13th June 2018]
Wesfarmers. (2018b) Corporate Governance [online] Available from https://www.wesfarmers.com.au/who-we-are/corporate-governance [Accessed on 13th June 2018]
Wesfarmers. (2018c) Our approach to sustainability [online] Available from: https://www.wesfarmers.com.au/investor-centre/company-performance-news/our-approach-to-sustainability [Accessed on 13th June 2018]
Wesfarmers. (2018d) Shareholders [online] Available from: https://sustainability.wesfarmers.com.au/our-report/stakeholder-engagement/shareholders/ [Accessed on 13th June 2018]
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