Analysis Of Tescos Corporate Social Responsibility Management Essay

Analysis Of Tescos Corporate Social Responsibility Management EssayCorporate Social Responsibility (CSR) is an important societal issue that also gains pulsing in the food retail pains (Tulder et al., 2007). In an approach to canvas the CSR activities, this report presents the CSR activities of Tesco, which is unmatched of the blend ining retailers. Further this report analyses the market and non market environment, which explains the intimate and external alignment as important factors to understand the design and the development of the companies CSR activities and motivations.The CSR business models in the retail industry are inclined towards the management of the cater chains. These models tell the firms what to do or how to do in general, to respond to the challenges and transplants in the retail industry, but do not provide sophisticated analytical models to meditate the actual position of the company and delineate the trajectories to change positions. (Tulder et al., 2007)CSR Corporate Social Responsibility is considered to be the future of all organizations in general and the retail industry in specific. However the firms brace to be more active on the categorization of CSR activities and on how the consistent implementation in the retail organization and in their distribution channels could be obtained. (Tulder et al., 2007)Tesco plc is worlds third largest, British inter field of study grocery and general merchandising retail chain with operations in 14 countries. It is the largest British retailer by both global sales and domestic market share, with profits exceeding 3 billion, and the third largest global retailer based on r horizontalue, behind Wal-Mart and Carre quadruplet. They cater for all sections of the market, with ranges spanning from premium ranges, as well as specialist ranges much(prenominal) as Organic, Fairtrade and Healthy Living. They are also into Non-food ranges accounted for 21% of conference turnover in 2008 and incl ude electrical goods, books, home-ware, sports equipment, personal finance and clothing. (Tesco, 2009)We understand that our success comes from behaving responsibly and earning the trust of our customers, suppliers and stakeholders. There are many complex issues that we have to face on a daily basis, from reducing our environmental impact to ensuring consistent standards across our markets. (Tesco, 2009). Corporate responsibleness represents an entire approach to business and is consequently embodied in Tescos governance framework to ensure that the company operates in a responsible and safe way.In general embodied responsibility is imbed in the following categories Tesco CSR ApproachEnvironmentCommunitySupplier and Ethical TradingCustomers, choice healthPeopleKPIsTesco CSR ActivitiesThe preceding(prenominal) approach integrates corporate responsibility in Tescos day-to-day business activities by admiting fair trade and taking customers, staff, communities and suppliers into c onsideration, as well as the environment and society.EducationEducation is one of the key areas of Tescos activities including a compact with I CAN, a charity that function of processs children with speech and language difficulties, or offering scholarships and establishing cultural community centres. A specific class is the Computers for Schools programme aimed at schools. Tesco provides schools with computers and supports the use of new technologies in different countries (Tesco, 2007).CharityThe Tesco Charity Trust was established in 1987 to support national and local communities qualification grants to charities within the UK (Tesco, 2007).Tesco dedicates 1% of pre-tax profits to good causes and supports charities as well as staff fundraising. In addition the companys supports the Race for Life fundraising event which focuses on cancer research and initiated the Tesco Charity of the Year (Tesco, 2007).Every year Tesco chooses a community charity close to the heart of its s taff and customers which becomes the main focus for staff fundraising and receives 20% top-up of the Tesco Charity Trust. For example the charity chosen for 2005 is Age Concern, an initiative concentrating on supporting older people in the UK by providing services such(prenominal) as day care and fulfilling randomness needs for topics such as care, money and finance, health, disabilities or neighbourhood issues (Tesco, 2007).EnvironmentIn terms of environmental protection Tesco has coordinated its corporate responsibility in its environmental management including topics such as emissions, resources, waste recycling and the companys products. Among others the issues covered are organic food, animal welfare, green embark and travel and vehicle efficiency. Furthermore Tesco is also concerned with energy efficiency and water consumption as well as its environmental impact in terms of its operations and customers (Tesco, 2007).Wildlife choice for example is an initiative requiring fa rmers to consider wildlife on their farms. They agree to improve operations and monitor their impact on farmland habitats providing habitats for wildlife such as a farm in the Midlands for example (Tesco, 2007). Tesco works closely with suppliers and farmers to protect wildlife.Tesco Market and Non-Market Environment AnalysisIn this report an approach to break down the market and non market environments is done with the help of soul and using various frame works same(p) An integrated framework (Baron, 1995 2005 32). Also by understanding the non market environment The 4IsSystematic LevelOrganisational LevelIndividual LevelAn Analysis a case analyzed by Lets clean up fashionIssue related to living employsPayment of living wages -workers being paid below living wage levels.Tescos focus on primarily on productivity projects.We believe that sustainable improvements to wages are most often delivered through improved productivity, up skilling workers and working to ensure our purch asing practices support our suppliers ability to invest in their workforce. (Tesco, CSR Report 2009)It lists specific wage and wage-related work under the following headingsEnsuring we understand the scale and nature of the issue. Activities Wage surveys and worker interviews in Bangladesh (Tesco, 2007).Setting clear expectations.Activities Lobbying government in Bangladesh to improve minimum wages, MFA Forum (Tesco, 2007).Supporting suppliers to improve productivity.Activities Lengthening lead times, producing seasonal items out of season to help suppliers plan production, rewarding ethical suppliers, expanding in-country ethical experts (Tesco, 2007).Building long-term traffichips to enable investment in workers. Activities Consolidating the supplier base, offering business support to A-list suppliers (Tesco, 2009).Tesco accept that some(a) minimum wage levels are unacceptably low and have conducted a wage survey with a supplier in Bangladesh (lets clean up fashion, 2009).Tescos Plans on Living takingsIts main focus for wages work is to continue with the ETI wages project.This concourse has experienced some delays over the last year payable to its focus on Bangladesh and that countrys political and industrial instability. However, it stated that, useful work has been shared, including by us, in the areas of productivity, efficiency, worker engagement, work flow, and purchasing practices. Following the summer this group will re-convene to decide on how to move forward. Building on this work, we will review further initiatives of our own specifi knelly in Bangladesh on productivity and wage improvements. (Tesco CSR Report, 2009)In an analysis done by the Lets Clean up fashion,Tesco seem to have made little progress towards living wages. Surveys in Bangladesh, showing the genteelness grade for workers being manipulated by suppliers for extended periods of time, informed a small piece of work to improve wages but this merely brought pay packets up to the le gal minimum standard and no more.Tescos belief that productivity is the best route to living wages seems to have ousted a hail of other options, such as support for freedom of association and a proper examination of pricing. Its focus on up skilling workers as a part of these improvements may be helpful for individual groups but doesnt achieve an across the board rise in wages. It is also unclear how it plans to ensure more skilled and expensive workers are not replaced by new, lower paid, unskilled workers. Furthermore, Tesco makes no mention of any work to ensure worker involvement in any of its projects, which makes us even less convinced that its productivity plans are likely to lead to any real benefit to workers.Tescos work with suppliers on purchasing practices offering longer lead times, producing out of season, ensuring long-term supplier relationships, and offering business advice could bring about some improvement. Last year it also acknowledged that price needed to be e xamined, but no progress seems to have been made in this area and no mention was made of plans to move this forward.Lets hope Tescos engagement in the ETI Wages Project over the coming year will see it start to output wage projects of its own, and give serious attention to delivering the living wages judge from a retailer of this size and influence (lets cleanup fashion, 2009).Tescos Position on Relationships with CustomersTesco tries to keep its prices as low as possible than most of the other national superstores. Tesco has an online Price checker, to show its low prices to its customers, through which customers can compare Tescos prices with those of other super markets (CRR, 2006). Price, though, is not the only factor. Value for money, as Tesco describes, includes the quality of the products, the personal service of their staff and the pleasant surroundings in their stores (AR, 1995). Tesco has become big by being like Britain. As Britons became more middle-class, Tesco follow ed them up market (Econ,2005).Tescos Position on SuppliersThe retail sector has a high increasing purchasing power, which can be used to cut prices and put pressure on the suppliers (cf. Fearne et al., 2005). Since Tesco is one of the four major global retailers, It is said that suppliers fear to complain about Tesco as they fear being struck off by the retailer (FT2005 FT2005). Tesco however mentions that it takes a partnership approach while working with suppliers, sharing their knowledge and listening to suppliers feedback, providing technical expertise, advice and insight into customer trends and making regular payment, on time (AR, 2007). Tesco monitors its relations with suppliers through the Supplier Viewpoint Survey. Their target is that 90% of UK suppliers view Tesco as being trustworthy, reliable, consistent, clear, helpful and fair (92% in 2008, 94% in 2007). In 2007 the worldwide suppliers have started taking part in the Supplier Viewpoint Survey (88%) (AR, 2008). Tesco fully supports the legally binding Supplier Code of Practice. In March 2005, the contribution of Fair Trading (OFT) audit found no breaches of the Supplier Code at Tesco (CRR, 2006) nor in 2006 (CRR, 2007). In 2005 rival companies and industry groups accused Tesco of slowing carry out the Office of Fair Tradings investigation during its early stages. The OFTs main concerns included claims that the supermarkets were slow to pay suppliers, required them to contribute to marketing costs and insisted on retrospectively changing contracts (FT, 2005). The investigation revealed that over the past five years, the amount owed to creditors by Tesco had risen by 1.5bn pounds, money it had used to help finance its growth (FT, 2005).Motivations and collaborationsAn attempt to analyze Tescos Motivations and its collaborations is done by using the following theoriesStrategy TheoryStakeholder TheoryAgency TheoryLegitimacy TheoryAn AnalysisTesco is engaged in number of NGOs and charity organisa tions. Tesco was engaged withThe Soil Association on extending the organic rangeThe Fairtrade Foundation to promote Fairtrade Fortnight and encourage more customers to choose FairtradeDiabetes UK on providing information for customers living with diabetesThe British Red Cross on responding to disasters and emergenciesMarine Conservation Society and Marine Stewardship Council on sustainable seafood sourcingGreenpeace on sustainable sourcing and climate changeFriends of the Earth on palm oil, prawn sourcing and GM animal feedActionAid and Women on Farms on labour standards in fruit farms in SouthAfrica. (CRR, 2006)Tesco is a corporate partner of Forum for the Future and work together on a broad range of sustainability issues.we held a nationwide Community Conference in partnership with the British Red Cross and the Work Foundation. This brought together voluntary groups, charities, businesses and government to explore the role of business in local communities (CRR, 2008 CRR, 2007).Wit h regards to economic development, the 2005 Make impoverishment History campaign place increased trade as one of three key means of eliminating poverty. Tesco sources products from farms in 15 African countries (CRR, 2006). Tesco actively supports communities bowlful sponsoring certain activities like the collaboration with Age Concern to raise 2 million for projects including Fight the Freeze buying blankets and heaters for the elderly paying for volunteersto regularly call the elderly to stop them feeling isolated, and raising money to pay for meals and provide company for the elderly (CRR, 2006). Tesco aims to give at least 1% of pre-tax profits to charity. In 2007 they succeeded with 1.95% (CRR, 2008) and in 2006 as well with 1.63% of pre-tax profits to charities and good causes (CRR, 2007). Tesco has also supported communities in crisis. In 2007, 250.000 pound was donated to people affected by extreme conditions conditions.Tesco is a founder member of the Ethical Trading In itiative (ETI) and expects all their suppliers to follow the ETI Base Code (CRR, 2006). The ETI Base Code includes among others freedom of association and the practiced to collective bargaining, no use of child labour and no excessive working hours (CRR, 2008)Tesco has with four other global retailers formed the Global Social respectfulness Programme to develop a code of practice. The GSCP has agreed a draft Reference Code between the 25 leading retailers and manufacturers currently involved. Next step involve the development of an audit checklist to ensure the Code is interpreted consistently around the world (CRR, 2008). In 2005 Tesco appointed a Code Compliance officer to act as a contact point for suppliers in case they have complaints and dont want to discuss these with Tesco buyers (CRR, 2008). Tesco participates in multi-stakeholder groups on corporate responsibility issues like condescension in The Community, The Ethical Trading Initiative, the Carbon Roundtable, GM Fre eze Roundtable, Forest Stewardship Council Retailers mathematical group, British Retail onsortium Corporate Responsibility Policy Advisory Group and the DEFRA Climate Leaders Group. The Executive Committee, Corporate Responsibility Committee and Compliance Committee are to help guide and monitor the set policies.ConclusionFrom the above discussions, it can be concluded that Tesco faces some severe in-coherence in its market and non market environments. On several issues such as environment the company has identified opportunities and taken many interesting (and active) initiatives, whereas in other instances the company behaves rather re-active. This corresponds with the in-coherent nature of its internal alignment strategy. The company is having difficulties with aligning some active intents, express through its KPIs with a re-active strategy (Tulder et al., 2007). Major challenge for Tesco, therefore, is how to create coherence through increased coordination and sustain the tran sition towards a more pro-active approach.ReferencesEthical business initiative. Downloaded from http//www.cleanupfashion.co.uk/companies/tesco.php. as of 9th March 2010.Tesco CSR 2009 report. Downloaded from http//www.investis.com/plc/cr09/crr09.pdf as of 5th March 2010.Tulder, R. van, M. Bleijenbergh, M. Danse, R. Wiersinga and M. Torppe, (2007) CSR Business Models and change trajectories in the retail industry. Downloaded from http//www.fairtradegemeenten.nl/uploads/news/december%202009/CSR%20business%20models.pdf as of 5th March 2010.Tesco countersign Article 6 (2007). Downloaded from http//www.tesco.com/talkingtesco/news/?page=article6 as of 6th March 2010.Tesco regulatory news part 2 (2008). Downloaded from http//www.tescocorporate.com/plc/ir/rns/rnsitem?id=1214847199nRn2d9573XHYPERLINK http//www.tescocorporate.com/plc/ir/rns/rnsitem?id=1214847199nRn2d9573Xt=popup_rnsHYPERLINK http//www.tescocorporate.com/plc/ir/rns/rnsitem?id=1214847199nRn2d9573Xt=popup_rnst=popup_rns as of 9th march 2010.Advfn final news (2008). Downloaded from http//www.advfn.com/news_Final-Results_27119452.html as of seventh March 2010.Tesco reports (2008). Downloaded from http//www.investegate.co.uk/Article.aspx?id=200806301833069573X as of 7th march 2010.Tesco News from Interceder (2010). Downloaded from http//interceder.net/news/Tesco as of 7th March 2010.Tesco CR Strategy (2010). Downloaded from http//www.tescoplc.com/plc/corporate_responsibility_09/approach/cr_strategy/ as of 7th March 2010.Tesco news (2010). Downloaded from http//www.freebase.com/view/en/tesco as of 7th March 2010.Tesco CSR review (2005). Downloaded from http//www.tesco.com/csr/e/e4_1.html as of 7th March 2010.Tesco community promises (2009). Downloaded from http//www.tesco.com.my/html/community.aspx?ID=9HYPERLINK http//www.tesco.com.my/html/community.aspx?ID=9PID=35LID=1HYPERLINK http//www.tesco.com.my/html/community.aspx?ID=9PID=35LID=1PID=35HYPERLINK http//www.tesco.com.my/html/community.aspx?ID=9PID=35LID= 1HYPERLINK http//www.tesco.com.my/html/community.aspx?ID=9PID=35LID=1LID=1 as of 7th March 2010.Tesco at a glance (2009). Downloaded from http//www.tescoplc.com/plc/corporate_responsibility_09/approach/tesco_at_a_glance/ as of 7th March 2010.Larry File, cornwall foundation case study Gingers presentation. Downloaded from http//www.cornwallfoundation.com/ways_to_give/CSRtalk22.1.10.htm as of 7th March 2010.Tesco ethical progress (2008). Downloaded from http//www.tesco.ie/crreview08/ethical-progress5.html as of 7th March 2010.Business and human rights resource centre. Downloaded from http//www.business-humanrights.org/Search/SearchResults?SearchableText=china+footwear as of 7th March 2010.Risks and uncertainities, Tesco CSR report page2 (2009). Downloaded from http//www.tescoplc.com/annualreport09/businessreview/risks_uncertainties/2/ as of 8th March 2010.Tesco news FT (2009). Downloaded from http//www.ft.com/cms/s/10613232-a507-11db-b0ef-0000779e2340,_i_rssPage=80830b5e-3018-11da-ba9 f-00000e2511c8.html as of 8th March 2010.Tesco reports. Downloaded from http//www.flex-news-food.com/pages/8283/Tesco/tesco-preliminary-results-20062007.html as of 8th March 2010.