RETAIL ISSUES AND APPLICATIONS
City and State
Retail Issues and Applications
Tesco is one of the leading retailers in the UK and globally that together with its competitors understand the importance of addressing issues pertaining to corporate social responsibility (CSR) and sustainability. The multinational corporation sells general merchandise and seems to pay more attention to groceries. The firm headquartered in Welwyn Garden City, Britain is the third most expansive retailer in the entire world in terms of revenue generation (Tesco 2021). Even though the group’s revenue fell from $84,331 in 2019 to $82,776 in 2020, which could be attributed to the global health pandemic and even lower to $75,022 in 2021, the group’s management hopes to make significant strides moving forward to achieve more impressive outcomes (Tesco 2021). Tesco competes with other leading retailers such as Sainsbury’s, Morrison’s, and Asda Stores Limited that deploy equally competitive techniques to enhance their operations and garner a significant portion of the market. Each firm acknowledges the significance of enacting adequate measures to address issues of CSR and sustainability that have immense impact on organizational practices and outcomes. The study, therefore, compares and contrasts how Tesco responds to CSR and sustainability with the key identified competitors. The study reveals that all the four leading operators in the UK retail sector commonly known as the Big Four understand the need to enact adequate measures to deal with issues emerging from CSR and sustainability. Each company knows that the potential merits of CSR to firms include, enhanced brand recognition, improved business reputation, customer loyalty and improved sales, and increased savings among many other benefits. The focus Tesco and its competitors give to issues of CSR and sustainability is a reflection of what other firms, small and mid-size enterprises (SMEs) and multinational corporations, do in an attempt to achieve the gains of addressing this areas competently.
Describing SCR and Sustainability
SCR is a business model that requires and allows firms to be socially accountable to all stakeholders and the public. By engaging in CSR also known as corporate citizenship, firms can be aware of the nature of effect they have on all components of the society, encompassing environmental, social, and economic (Michel & Buler 2016, p. 499). Practicing CSR means that, in engaging in normal business practices, a firm is functioning in ways that boost the environment and society rather than contributing adversely to them. CSR is an extensive field that can take various aspects depending on the organization and sector. Through volunteer initiatives, philanthropy, and SCR programs, companies can help the society while strengthening their brand (Michel & Buler 2016, p. 500). As essential as CSR is for communities, it is equally helpful for a business. Venturing into CSR practices can make it possible to enhance the relationship between organisations and their workers, promote morale, and help both employers and workers feel more attached to the world around them (Michel & Buler 2016, p. 504). For a firm a firm to be socially responsible, it should first be accountable to all stakeholders and to itself. Typically, businesses that invest in CSR initiatives have developed their business to a place where they can give back to the society. It is the reason why large corporations are the leading operators in this area. After all, the more prosperous and visible an organization is, the more obligations it has to set measures of ethical conduct for its sector, competitors, and members (Michel & Buler 2016, p. 505). Nonetheless, SMEs also engage in CSR initiatives, although their practices are not usually as well-orchestrated and publicized as large entities. Today, corporations strive to adhere to the 2010 guidelines of the International Organization for Standardization (ISO) ISO 26000 that set guidelines for companies on how to participate in CSR initiatives (ISO 2021). Each firm, big or small, should invest in CSR to benefit from its merits.
Corporations that do not pay considerable attention to CSR are less likely to achieve sustainability that is equally essential for businesses that aspire to improve their practices and have a significant impact on the communities and societies they serve. In business context, sustainability implies to engaging in business practice without adversely impacting the society, community, or the environment (Baglione 2014, p. 1). Sustainability in business often focuses on two chief areas; the impact business has on the environment and the effects it has on the society. The objective of sustainable business practice and strategy is to have positive effects on at least one of the two areas. Nevertheless, when corporations fail to take responsibility, inappropriate outcomes can emerge, resulting to concerns like social injustice, imbalance, and environmental depreciation. Consequently, firms should engage in sustainable practices that consider a broad range of social, economic, and environmental factors when making business decisions (Baglione 2014, p. 2). Firms that pay considerable attention to this area asses the effects of their activities to ensure that their quest for short-term profits do not transform into long-term challenges and liabilities (Baglione 2014, p. 2). So far, various corporations have made tremendous steps in achieving sustainable practices. Baglione (2014, p. 4) writes that as expectations on corporate citizenship intensify, and accountability become more imperative, firms are acknowledging the need to embrace sustainability. Baglione (2014, p. 4) further argue that good intentions and professional communication are no longer adequate to boost performance. It, therefore, means that participating in CSR practices presents a better chance to achieve sustainability in business. The increased urge to achieve sustainability further reiterates the importance of CSR programs, and also challenges businesses that are yet to develop strategies that allow them to venture into this area to take timely measures.
Firms that do not pay adequate attention to issues emerging from CSR and sustainability are likely to encounter certain undesirable effects. It is always important to remember that corporate social responsibility is now a mainstream concern, as firms across the globe have realized that doing good for their workers, the communities they serve and the environment has significant impact on their bottom line (Michel & Buler 2016, p. 504). Companies have learned that their suppliers and other key stakeholders are enacting CSR measures for the firms they relate with and have realized that their consumers and workers want to work, relate and stay with an organization that is dedicated to the concepts and principals of social responsibility (Michel & Buler 2016, p. 504). More companies not recognize that their profits do not entirely emerge from the fame of their brand and the quality of their products and services, but also rely on the reputation they create as a sensitive and caring entity. It is clear that an organization that do not emphasize on CSR and sustainability may fail to build a strong relationship with the communities they serve, something that could tamper with the brand reputation (Michel & Buler 2016, p. 505). A company that cannot create an effective tie with the communities and societies it serves may not reach its financial objectives because not many buyers would want to relate with an entity that does not care for their needs. Besides, failure to participate in CSR initiatives portrays the company as not being transparent in its deeds, which could also affect performance. A corporation may be termed as unaccountable because it does not show or exemplify how it protects social and environmental needs (Michel & Buler 2016, p. 505). Another possible effect of not taking part in CSR initiatives is that it may not attract top talent because highly qualified employees mostly want to be part of organisations that focuses on critical aspects, including CSR (Michel & Buler 2016, p. 505). Consequently, companies are enacting measures to emerge as key operators in CSR and sustainable practices.
CSR and Sustainability Practices at Tesco
Tesco has adopted a wide range of measures to facilitate its CSR and sustainability practices. One approach that allows the group to venture effectively in this area is that the firm’s leadership is committed to improve operations in the area and continues to provide all the needed support. Chief Executive Officer (CEO) Ken Murphy has maintained the trend since the times of Sir Terry Leahy of supporting CSR practices (Tesco 2021). The corporate leader reports that the firm’s approach to corporate responsibility (CR) is straightforward. The leader says that the company acknowledges that its impact on the society, on the environment, and on the economy. Thus, the group dwells its attention to practical approaches that create a difference; magnifying the returns the firm brings and reducing any negative implications (Tesco 2021). The group’s leadership aspires to take charge for these outcomes, to assess, and deal with their effects. Tesco, through the guidance of its leadership, also aims at working with all stakeholders on matters of CSR and sustainability to ensure that all enacted measures to foster CR penetrates through all aspects of the firm. The company’s leadership reiterate that CSR is not an additional challenge or hindrance from serving buyers, but is instead a critical aspect of sustaining the company as a responsible retailer (Tesco 2021). The management continuously remind its members that CSR is a win-win for the company and for the communities it serves. It is the reason why the management continues to expand its investment in this area with the belief that the support will improve how the company focuses on this area (Tesco 2021). The leadership believes that through the stewardship and provision of all financial support Tesco will emerge as one of the most effective operator in terms of CSR and sustainable practices.
In addition to effective leadership that allows the company to react effectively to issues emanating from CSR and sustainability, Tesco is dedicated to listening to its stakeholders and acting on what they say when the group feels that it will impact on its sustainable practices. The group is committed to listen to what its customers say regarding CSR initiatives because it claims that one its core values is to understand its buyers better than anyone (Tesco 2021). The company does more than enough to ask buyers what they want and think, listen to their opinions, and then take actions to implement them. The response guides the company in the decisions it takes concerning CSR. Tesco has devised a Customer Question Time (CQT), which is a tool that head office and store representatives utilize to gather and listen to buyers’ opinions on key concerns such as CSR and sustainability (Tesco 2021). The group has established thousands of CQT locations across the UK, engaging more than 9000 purchasers and at least 2200 members of staff and believes that the initiative is one of the largest of its kind throughout the UK. The company utilizes CQTs as tool for knowing what its customers think about adopted CSR practices in all stores across the world (Tesco 2021). To allow the company meet consumer expectations, the firm has established a yearly consumer plan that directly targets enhancing CSR outcomes in the identified areas with the hope of increasing buyer loyalty. The company also conducts surveys to find out public’s attitude towards the company’s CSR and sustainable practices. For instance, the company conducted more than 2300 interviews in the summer of 2003 while engaging the business community, investors, members of parliament, and the general public (Tesco 2021). Without any prompt, most participants responded that they think Tesco is the most concerned entity when it comes to responding to ethical, social, and environmental issues. However, the survey revealed that operators in the industry at large are yet to embrace techniques that adequately address issues emerging from CSR and sustainability (Tesco 2021). Such surveys are equally essential in helping Tesco enact measures that stakeholders think will improve how the company practices CSR and sustainability and deals with issues emerging from this area.
More fundamentally, Tesco has made practical initiatives in different areas as a show of its commitment to enhance CSR initiatives. The company has structures that guide its responsible utilization of technology as well as its sustainable use of raw materials (Tesco 2021). The team also has measures to direct its animal welfare program as well as to booth ethical trading. Furthermore, the group has invested significantly in community programs that exemplify its commitment to venture into CSR and sustainable practices. For example, the company adopted the Little Helps Plan in 2020 that outlines its plans to help the communities it serves and the environment (Tesco 2021). The Plan encompasses the group’s dedication to eradicate deforestation from the company’s products and make its packaging entirely compostable or recyclable by the year 2025. The firm informs that approximately one third of the food suitable for human consumption don not reach the table and many UK households discard a lot of perfectly proper food each year. Alongside, the plight of plastic pollution is affecting various ecosystems, particularly large water bodies that continue to witness increased piling. The group has embarked on various strategies including implementing the 3Rs of waste management (recycling, reuse, and reducing) to achieve a clean environment (Tesco 2021). In addition, Tesco supports educational practices by supplying computers to schools, which has boosted education and research in learning institutions in the UK and other countries where the company operates. Besides, the company offers financial grants to fund numerous local projects across the UK, and also offers support to eradicate hunger in the region (Tesco 2021). Moreover, the group has plans to address mental health issues, provide young people with an opportunity to excel, and conduct community events where people meet, interact and share widely on many issues.
Measures Adopted by Competing Firms
Sainsbury’s, Morrison’s, and Asda Stores are Tesco’s chief competitors that deploy equally similar measures to enhance their participation in CSR and sustainable practices. A common approach in the way Tesco’s competitors take part in CSR initiatives and sustainable practices is that they adhere to the provisions of ISO 26000 give adequate directives to companies that seek to operate in a socially responsible manner. The framework offers guidance to companies that acknowledge that respect for environment and society is a critical aspect for growth and prosperity. As well as being the correct thing to do, Sainsbury’s, Morrison’s, and Asda Stores perceive ISO 26000 as an avenue for assessing their dedication to sustainable practices and overall outcome. Through the guidance of ISO 26000 Sainsbury’s, Morrison’s, and Asda Stores understand what social responsibility entails, and to transform principles into practical remedies. ISO 26000 that applies to both small and large organisations guide Tesco’s competitors on how to abide the seven chief principles of ISO 26000. Thus, the three companies are able to indulge in CSR practices while adhering to accountability, ethical practice, transparency, respect for stakeholders’ views and interests and adherence to the rule of law (ISO 2021). Moreover, the principles guide the companies to indulge in practices that adhere to international frameworks of behavior and respect human rights (ISO 2021). In addition to following the fundamental provisions of ISO 26000, Sainsbury’s, Morrison’s, and Asda Stores are similar in the way they have a separate entity to deal with CSR and sustainability-related issues. For example, Sainsbury’s has passed CSR duties to its Sustainability Committee that enacts all suitable plans. Similarly, Morrison’s has a special department committed to improving CSR initiatives at the company. Through the support from the management and its key stakeholders, Morrison’s has managed to invest in many community programs aimed at improving the livelihood of members of the communities and societies it serves (Morrison’s 2019). Furthermore, Asda Stores assigns a specific body to handle all CSR-related practices and to introduce and implement measures that it believes will improve how the corporation responds to social and environmental needs.
Sainsbury’s, Morrison’s, and Asda Stores have also embarked on many community programs aimed at helping the community and improving the quality of the environment. Since the start of 2016, Morrison’s has donated more than five million food items that were unsold in its stores across the globe (Morrison’s 2019). Within its distribution facilities and production sites, Morrison’s continues to work through its initiatives such as Fare Share and Company Shop distributes to less fortunate families more than two million food items that would go to waste (Morrison’s 2019). Sainsbury’s engages in many volunteering programs and helps many livelihoods through its fundraising programs (Sainsbury’s 2021). Sainsbury’s has plans to improve its network of charity food donation and introduce people to affordable and renewable energy plans (Sainsbury’s 2021). Similarly, Asda Stores has embarked on various programs that directly helps people in the communities where it operates. The company engages in practices aimed at addressing climate change, eliminating wastes, and protecting and restoring nature (Asda 2021). The group has also established recycling points where people bring recyclable items and get payment for it (Asda 2021). The adopted measures by Tesco’s competitors affirm that corporations must embrace a wide range of measures to enhance their CSR and sustainability practices.
Tesco together with its competitors have embraced measures to improve how they respond to CSR and sustainability issues. The study identifies both phenomena (CSR and sustainability) as increasingly gaining prominence among operators who now acknowledge that good performance does not only emerge from delivering quality services and products. Thus, Tesco invests significantly in this area with the belief that this will improve its relationship with all stakeholders. The company’s management is committed to provide all the needed support to ensure that the company excels in this area. Tesco engages its customers and other key stakeholders through surveys that help the company to understand what others think about its CSR and sustainable practices, which also informs it about what needs to happen to record better outcome. The company has also introduced a number of programs to help the community. It has established various programs to help communities in the UK. It has plans to tackle hunger, fight mental problems, help young people become independent and deal with other disturbing issues, and organize events where members of the communities get the opportunity to interact and share on many issues. Tesco’s competitors are also enacting measures that allow them to venture effectively in CSR initiatives and sustainable practices. Sainsbury’s, Morrison’s, and Asda Stores follow the directives of ISO 26000 and assign the duty of CSR and sustainability to particular divisions. The attention all these firms have towards CSR initiatives and sustainability is enough evidence that corporations that do not focus on this area are likely to encounter significant challenges in their attempt to establish strong relationships with the societies and communities they serve.
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